Powell: There is a risk high inflation will be prolonged

Fed Chair Jerome Powell, in his usual post-Fed meeting press conference on Wednesday, said there is a risk high inflation will be prolonged, even though it’s not our base case.

Additional Remarks:
“We have to be able to address all plausible outcomes.”

“We need to be in a position to address the risk that inflation remains higher.”

“What we need is another long expansion.”

“To get back to long expansion, need price stability.”

“We need to do our part in getting inflation back down.”

“The Covid pandemic is not over and could continue to evolve and harm growth.”

“Another risk is further supply chain issues.”

“The Eastern Europe situation is another risk.”

“There are plenty of risks out there and we can’t forget there are risks on both sides.”

When asked for details on former Dallas Fed Chief Robert Kaplan’s stock-trading, Powell says “Fed board does not have that information.”

“Since the last meeting, the inflation situation is slightly worse.”

“I would raise my SEPs on inflation for this year if I was writing them today.”
“If inflation deteriorates further, we will have to address that.”

“Moving away to substantially less accommodative, and in time to non-accommodative policy, will be part of bringing inflation down.”

“We need to move to substantially less accommodative policy.”

“We will eventually get relief on the supply side, though it’s taking longer than expected.”

“There’s a risk inflation will stay high longer than expected.”

“Our aim is to get inflation back down to 2%.”

“The labor market is very, very strong right now.”

“There are very large wage increases.”

“The outlook is quite uncertain.”

“We will have to adapt due to the uncertainty of the outlook.”

“We will have to adapt and move as appropriate.”

“We fully appreciate this is a different situation than the last time Fed raised rates.”

“Right now inflation is high, growth is higher than potential, labor market is historically tight.”