Fed Reserve chairman says ‘inflation is much too high,’ suggests a more aggressive stance

Harry Wilmerding, DCNF

Federal Reserve Chairman Jerome Powell said Monday that soaring prices have become a concern for the U.S. economy, and he suggested that the central bank may take stricter measures to address growing inflation.

“The labor market is very strong, and inflation is much too high,” Powell said in prepared remarks for the National Association for Business Economics. The Consumer Price Index increased 0.8% in February to 7.9% on a year-over-year basis, the highest level in 40 years.

Powell reiterated the remarks he made after the Federal Open Market Committee’s meeting Wednesday, saying rate hikes will continue until inflation is under control. He did not rule out more aggressive rate hikes than the planned quarter-point move announced after the meeting.

“We will take the necessary steps to ensure a return to price stability,” Powell said in Monday’s speech.

“In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so,” he said. “And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

In August 2021, Powell dismissed long-term inflation, saying “elevated readings are likely to prove temporary.”

“Inflation at these levels is, of course, a cause for concern,” he said at the time. “But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary.”

Powell said Monday that forecasters “widely underestimated” inflated prices, which he attributed to supply chain disruptions and elevated consumer demand coming out of the pandemic.

“Why have forecasts been so far off?” he asked in his speech. “In my view, an important part of the explanation is that forecasters widely underestimated the severity and persistence of supply-side frictions, which, when combined with strong demand, especially for durable goods, produced surprisingly high inflation.”

For licensing opportunities of our original content, please contact [email protected]

DONATE TO BIZPAC REVIEW

Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!

Success! Thank you for donating. Please share BPR content to help combat the lies.

Comment

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

PLEASE JOIN OUR NEW COMMENT SYSTEM! We love hearing from our readers and invite you to join us for feedback and great conversation. If you've commented with us before, we'll need you to re-input your email address for this. The public will not see it and we do not share it.

Latest Articles