Price Stability in an Uncertain Economic Environment

In a speech on Monday, Lael Brainard, the vice chair of the Federal Reserve, reiterated the central bank's intention to keep stifling the economy by rising interest rates until price increases are noticeably slower while outlining possible reasons why inflation may soon decline.

“Monetary policy will be restrictive for some time to ensure that inflation moves back to target over time,” Ms. Brainard said.

Economists have cautioned of a larger chance of a worldwide recession as so many countries raise rates so swiftly and markets have grown more susceptible to unrest.

“We are also very aware that the cross-border effects of unexpected movements in interest rates and exchange rates, as well as worsening external imbalances, in some cases could interact with financial vulnerabilities,” she noted.

The Fed, according to Ms. Brainard, is in frequent contact with central banks across the world, and many international monetary authorities are working together to combat inflation while also attempting to be open with one another as they make policy decisions. She added that the Fed frequently communicates with representatives of international financial stability.