Chairman Powell says efforts to reduce inflation will “bring some pain.”
Members of the Federal Reserve have been meeting in Jackson Hole, Wyoming, and on Friday, Chairman Jerome Powell delivered a speech signaling that bringing down inflation will require some economic pain.
Chairman Powell said the Fed has no intention of reversing course and cutting rates. He was direct in conveying the resolve of the central bank to bring down inflation.
“Reducing inflation is likely to require a sustained period of below-trend growth,” Chairman Powell stated. “Moreover, there will very likely be some softening of labor market conditions.”
“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.”
“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” the Fed chair said. “The historical record cautions strongly against prematurely loosening policy.”
“We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. We will keep at it until we are confident the job is done.”
As the Lord Leads, Pray with Us…
- For discernment for the chairman and members of the Federal Reserve as they seek to stop inflation.
- For Secretary Yellen to seek God’s guidance as she heads the Treasury Department.
- For members of the National Economic Council as they advise the president.
Sources: Axios, Washington Examiner
