What can we conclude from Jerome Powell’s statements?
In late February 2021, Jerome Powell stated that: There is no sign of inflation and there is no link between the fiscal deficit and inflation; The employment rate is abnormally low and the Federal Reserve wants to return to full employment; The objective is for inflation to exceed 2% and nominal growth must ultimately exceed debt growth. From an economic standpoint, these statements show that the United States will not exit its expansionary monetary policy in the short term, contrary to what may have been expected. From a structural viewpoint, we can clearly see the Federal Reserve's shift: average inflation targeting and the weakening of the Phillips curve make it possible to switch to a full employment objective for a long period of time.