Federal Reserve Chairman Jerome Powell testified before Congress on Tuesday. Jerome Powell emphasized that the task of controlling inflation is far from over. Powell indicated that further increases in interest rates are probable as a means to tackle the issue.
During his appearance before the Senate Banking Committee, Powell emphasized the Federal Reserve’s firm dedication to reducing inflation to the desired 2% level. Jerome Powell stressed that the central bank’s plan involves raising interest rates until there is undeniable proof that inflation is decreasing.
Powell acknowledged that raising interest rates could slow economic growth. However, he said that the Fed is “prepared to do whatever it takes” to bring inflation under control.
“We understand the hardship high inflation is causing, and we’re strongly committed to bringing inflation back down,” Powell said. “We’re moving expeditiously to do so.”
The Federal Reserve has increased interest rates by 75 basis points recently. Powell stated that they are ready to take stronger action if necessary.
Jerome Powell testimony highlights the Fed’s tough task: controlling inflation without triggering a recession. The US economy is slowing down, yet inflation persists at high levels.
There are different opinions among economists regarding the Federal Reserve course of action. Some economists argue that the Fed should increase interest rates by 175 basis points over the year to address inflation. However, there is a contrasting view that suggests aggressive rate hikes could potentially lead to a recession.
Investors and economists are eagerly awaiting Powell’s testimony. They want to understand the Fed’s plan to combat inflation.
