Fed vows 'unconditional' commitment to restore price stability: Report

By Ovunc Kutlu

ANKARA (AA) - US Federal Reserve vowed on Friday its "unconditional" commitment to restore price stability against record-high inflation in its Monetary Policy Report⁠ that is submitted semiannually to the Congress.

"Sustainably achieving maximum employment and price stability depends on a stable financial system. Therefore, the Committee’s policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks," the report said.

Noting that the three-month measures of core inflation have softened since December, the report said core inflation remains far above levels consistent with price stability, while measures of near-term inflation expectations continued to rise markedly.

The Fed emphasized that supply chain issues, hiring difficulties and capacity constraints have prevented supply to satisfy strong demand, which resulted in large price increases for many goods and services over last year.

The central bank said Russia's war on Ukraine and related sanctions caused a disruption in commodities, and led to increasing prices and high volatility, especially in agriculture, energy, and metals markets.

In order to fight against 40-year high inflation, the Fed on Wednesday made its steepest rate hike in 28 years by raising interest rates 75 basis points, after a 50 basis point hike in May and a 25 basis point hike in March.