Fed’s Powell Doesn’t See Sustainable Rise in Inflation Soon

The United States Federal Reserve Chair, Jerome Powell, on Wednesday said that he does not see a large nor sustained rise in inflation.

Powell noted that an increase in consumer prices as spending rises after the economy reopens are not expected to be continue for long.

“Inflation has been much lower and more stable over the past three decades than in earlier times.”

“In the 1970s, when inflation would go up, it would stay up.”

“These late-breaking improvements in the labor market did not result in unwanted upward pressures on inflation, as might have been expected: in fact, inflation did not even rise to 2% on a sustained basis.”

“There is every reason to expect that the labor market could have strengthened even further without causing a worrisome increase in inflation were it not for the onset of the pandemic.”

Powell further reiterated the stand that the Fed would not consider interest rate hikes even if the inflation rates went above its 2% strategic target.