Federal Reserve Chair Jerome Powell told Harvard economics students Monday that the Fed has not yet reached the point where it needs to decide whether to "look through" the energy shock from the Iran war. Powell said the central bank doesn't know what the economic effects will be and feels its current policy is well-positioned to wait and see how events unfold.
The comments come as the Fed continues working to bring inflation down to its 2% target after the pandemic-era surge. Powell noted that while inflation has been declining toward the target, it has never actually reached and stayed at 2%. The Fed chair emphasized that inflation expectations remain "well-anchored beyond the short term," reducing immediate pressure to act.