In a speech on Tuesday, Federal Reserve Chairman Jerome Powell warned Washington lawmakers that the reason for the recent rise in inflation may last longer than expected.
In his speech to the Senate Banking Committee, the chairman of the central bank said that economic growth “continues to strengthen”, but due to supply chain bottlenecks and other factors causing pressure to increase prices.
Powell said: “Inflation rates are rising, and they may stay that way in the next few months before they ease.” “As the economy continues to reopen and spending rebounds, we see upward pressure on prices, especially due to certain Supply bottlenecks in the industry. These effects are greater than expected and last longer, but they will weaken, and will weaken like them. Inflation is expected to fall back to our long-term 2% target.”
These remarks are part of the mandatory testimony Powell must provide to Congress on the Fed’s economic response to the Covid-19 pandemic. He will speak to the House Financial Services Committee on Wednesday.
After last week’s meeting, the Fed stated It will soon start to retreat Some stimulus measures it provided during the crisis.However, officials emphasized that the decrease in monthly asset purchases is Doesn’t mean raising interest rates is imminent.
Powell said: “As long as the time required to complete the recovery, we the Fed will do our best to support the economy.”
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