Fed’s Powell vows to fix inflation

The Federal Reserve Chair Jerome Powell said on Thursday that the US central bank’s battle to tame inflationary pressures would “include some pain” as the impact of higher interest rates is being felt, but that the worse outcome would be for prices to continue speeding ahead.”

“We went through periods in our history where inflation was quite high … The process of getting inflation down to 2% will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels, and we know what that’s like. And that’s just people losing the value of their paycheck.”

”Nothing in the economy works, the economy doesn’t work for anybody without price stability,” Powell said, adding that policymakers understand and appreciate how painful inflation is. Powell

In an interview with the Marketplace national radio program, Powell reiterated his expectation that the Fed will raise interest rates by half a percentage point at each of its next two policy meetings. He vowed that if data turns the wrong way, the Fed’s policymakers are prepared to do more.

Meanwhile, the US dollar has made a fresh 20-year high on Thursday due to the persisting concerns that the Fed’s actions to drive down high inflation would crimp global economic growth, boosting the currency’s safe-haven appeal.