Powell said higher interest rates may bring 'pain to households and businesses,' but that 'a failure to restore price stability would mean far greater pain.'
Federal Reserve Chair Jerome Powell warned Friday that additional interest rate hikes are likely coming as part of the central bank's efforts to curb inflation.
During his remarks at the Federal Reserve's economic policy symposium in Jackson Hole, Wyoming, Powell said that"restoring price stability will take some time and requires using our tools forcefully to bring demand and supply better into balance." "While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," he said.Above, Federal Reserve Chair Jerome Powell speaks during a news conference at the headquarters of the Federal Reserve on July 27 in Washington, D.C.
He added that following Powell's Friday speech, it"sounds like the Fed for the first time realizes that inflation could be an ongoing threat." "It doesn't sound like Jay Powell right now wants you to believe that inflation is under control because it sounds like Jay Powell is sending a pretty strong signal that the Open Market Committee is continuing to take inflation very seriously," the professor said.
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