Powell: Big part of inflation won’t be affected by our tools

For the second day, FOMC Chair Jerome Powell is testifying before the House Financial Services Committee on “Monetary Policy and the State of the Economy”. The US Dollar Index edged higher after these comments and was last seen rising 0.2% on the day at 104.38.


Key Remarks

“Our tools affect inflation, not necessarily wage inflation”.

“Some of these wage increases are substantially bigger than is consistent with 2% inflation”.

“Fed isn’t looking for new tools”.

“A big part of inflation won’t be affected by our tools, but a big part of it will be”.

“Our tools are blunt but they are the right tools to deal with demand”.

“That’s a bigger piece than energy and food prices”.

“We are not seeking deeper involvement in the economy”.

“We are not seeking new tools, though it’s up to Congress if it wants to change Fed mandate”.

“We need to get supply and demand back in better balance.”

“Financial markets have been functioning well, banking system is very strong, well-capitalized.”

“Liquidity in the treasury market has come down from where it was; looking at ways to address that.”

“US is on an unsustainable fiscal path.”

“There’s a problem with longer-term housing supply.”

“Housing market is slowing down to some extent now due to higher mortgage rates.”

“Growth this year should still be fairly strong.”

“We are trying to moderate demand so inflation can come down.”

“We can’t fail on getting inflation down.”

“Would be reluctant to cut rates.”