Fed Chair VOWS To Fight Inflation Because It’s Now Running Too High

Fed Chair VOWS To Fight Inflation Because It’s Now Running Too High

Jerome Powell, the chairman of the Federal Reserve, told House legislators on Wednesday that the institution has the power to lower inflation and is committed to doing so.

We at the Fed are aware of the difficulties that high inflation is generating. In testimony to the Senate Banking Committee, the Fed chairman stated, “We are deeply committed to getting inflation back down, and we are moving rapidly to do so. In order to restore pricing stability for American families and companies, we have both the necessary instruments and the requisite resolve.

In addition to vowing to fight inflation, Powell said that the overall state of the economy is positive, with a robust labor market and consistently rising demand.

He did admit that inflation needs to cool off because it is now running too high.

According to Powell, “over the next few months, we will be looking for persuasive evidence that inflation is heading down, consistent with inflation returning to 2 percent.” “We think that continued rate hikes will be reasonable; the rate of change will continue to be influenced by the incoming data and the changing economic outlook,” the statement reads.

Inflation pressures are being exacerbated, he said, by the conflict in Ukraine and the China-related blackouts tied to Covid, and he added that this is a problem that is not only harming the US economy but many other nations as well.

In accordance with a congressional obligation, Powell’s comments are part of a semi-annual report on monetary policy that is more popularly known in the markets as the Humphrey Hawkins report and testimony.

For Fed policy, this is a very delicate time.

How many people signed the Declaration of Independence?(Required)
This poll gives you access to Wayne Dupree's newsletter! Unsubscribe any time.
This field is for validation purposes and should be left unchanged.

In an effort to combat inflation, which is currently running at its fastest annual pace in more than 40 years, the central bank has hiked rates a total of 150 basis points over its last three meetings, or 1.5 percentage points.

The Federal Open Market Committee meeting last week saw the largest single increase since 1994 with a 75 basis point increase.

Powell has emphasized his belief that tighter monetary policy will be a successful tool against inflation and that the economy is prepared to withstand higher rates.

Although the economy has been slowing this year, flaws have been visible and suggest that higher rates are on the way.

According to the Atlanta Fed, the first quarter’s gross domestic product shrank by 1.5 percent annualized, and the second quarter is expected to be flat. At a time when inflation-adjusted salaries have decreased by 3% over the previous year, housing sales have been falling, and there have even been some indications that the jobs market is gradually slowing down.

Powell and his colleagues policymakers have said the rate hikes will continue despite the hiccups in the economy. According to projections made at the meeting last week, the Fed’s benchmark short-term borrowing rate will increase from its current planned range of 1.5 percent -17.5 percent to 3.4 percent by the end of this year.

The opinions expressed by contributors and/or content partners are their own and do not necessarily reflect the views of WayneDupree.com




DEAR MEMBERS,
Are you sick of seeing ads? Well then it's time to get rid of them! WayneDupree.com is proud to offer a PREMIUM VIP MEMBERSHIP that eliminates ads and gives you the BEST browsing experience.

SIGN UP HERE and join us!



Follow Wayne on Rumble!