The central bank Chairman Jerome Powell warned on Thursday that bringing inflation under control might cause some economic pain, but he said that it is a top priority of the Fed. The remarks came on the same day the Senate confirmed Powell for a second term.
Powell said that he can’t promise a so-called soft landing as the Fed increases interest rates to control the increasing prices that are running at the fastest speed in more than 40 years.
The central bank chief said, “A soft landing is, is just getting back to 2% inflation while keeping the labor market strong. And it’s quite challenging to accomplish that right now, for a couple of reasons. It will be challenging; it won’t be easy. No one here thinks that it will be easy. Nonetheless, we think there are pathways for us to get there.”
The second-term priorities for J Powell will be to control increasing inflation that in April showed an 8.3% annual rate.
Powell said, “We understand the added pain that higher rates may cause, but the Fed needs to act aggressively. Our goal, of course, is to get inflation back down to 2% without having the economy go into recession, or, to put it this way, with the labor market remaining strong. That’s what we’re trying to achieve. I think the one thing we really cannot do is fail to restore price stability, though. Nothing in the economy works, the economy doesn’t work for anybody without price stability.”
Powell said., “Now, we see the picture clearly and we’re determined to use our tools to get us back to price stability.”