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The Chairman of the United States Federal Reserve, Jerome Powell, recently told a Senator that inflation would be a little higher in 2021, due to the economic recovery from the coronavirus pandemic.
However, Powell has vowed in his letter to Rick Scott on April 8 to limit consumer prices overshooting, Reuters first reported on Tuesday.
The Fed has repeatedly said that it expects the inflation rate to exceed the 2% target for some time.
“We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period.”
“I would emphasize, though, that we are fully committed to both legs of our dual mandate – maximum employment and stable prices.”
“Our future policy actions will be based on actual progress toward our objectives.”
“If progress towards our employment and inflation objectives slows, we will maintain a highly accommodative stance for longer. Conversely, if progress turns out to be more rapid, adjustments to the stance of policy would likely occur sooner.”
“We understand well the lessons of the high inflation experienced in the 1960s and 1970s and the burdens that experience created for all Americans.”
“We do not anticipate inflation pressures of that type, but we have the tools to address such pressures if they do arise.”
