Fed is 'acutely' focused on returning inflation to 2.0 per cent, Powell says
Policymakers at the US central bank are "acutely" focused on maintaining price stability as well as financial stability, with the latter of key importance for meeting the Federal Reserve's mandate of achieving 2.0% inflation and full employment, Jerome Powell said.
In remarks prepared for a speech at a research conference sponsored by the Fed board, its chairman also highlighted how price stability encourages other countries to hold and use US dollars.
Nonetheless, "rapid changes" were under way in the global monetary system that might impact the dollar's role in the future, he said, mentioning the development of instant 24/7 payments and the tremendous growth in crypto-assets and stablecoins.
In that context, the Fed was studying whether a US central bank digital currency "would improve on an already safe and efficient domestic payments system".
It might also potentially help preserve the dollar's international standing.
"As we consider feedback from the paper, we will be thinking not just about the current state of the world, but also how the global financial system might evolve over the next 5 to 10 years.
"[...] To summarize, I would like to stress the importance of the dollar to the U.S. and global economies and financial markets. It is critical that we understand the channels, connections, and effects of the role of the dollar."