Fed’s Powell Tells Congress Inflation Will Ease Over Time

U.S. Federal Reserve Chairman Jerome Powell told lawmakers on Tuesday that the economy has notably improved amid recovery from the Coronavirus pandemic and that inflation will ease over time following the recent surge.

Testifying for the second consecutive day before the House of Representatives Select Subcommittee on the Coronavirus Crisis, Powell said that the “widespread vaccinations have joined unprecedented monetary and fiscal policy actions in providing strong support to the recovery.”

“Indicators of economic activity and employment have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades. Much of this rapid growth reflects the continued bounce back in activity from depressed levels.”

The testimony comes following the recent Fed’s meeting, which saw a surprise hawkish change in tone, with expectations of two interest rate hikes by the end of 2023, sooner than previously expected.