Muted US inflation lessens need for interest rate hikes, Fed's Powell says

Persistently low US inflation, despite historically low unemployment, reduces the pressure on the central bank to raise interest rates, Federal Reserve Chairman Jerome Powell said Wednesday.

Noting the structural change in the US economy, Powell said it is a “good thing” the Fed no longer has to be so concerned about strong labor markets, which produced a 3.5 percent unemployment rate.

“The need for rate increases is less,” he told reporters, following the Fed decision to keep the policy interest rate steady.