The risks of “persistent” high inflation have “clearly increased”, Federal Reserve Chairman Jerome Powell told a congressional finance committee on Wednesday, adding that monetary policy would be adjusted.
This is another clear signal from the head of the US Federal Reserve that the Fed will accelerate the tightening of its monetary policy, as it did yesterday, during the first day of its hearing by the Congressional Committee.
“(Monetary policy) has adapted to this and will continue to adapt,” Powell told the commission, adding: “We have seen that inflation is more persistent. “We have seen that the factors that lead to rising inflation are more persistent.”
Speaking to the commission yesterday, Powell said it was an “appropriate approach” to ask the forthcoming meeting of the Federal Reserve to end the emergency asset purchase program earlier than planned, due to the increased risk of inflation.
He added that he would like to change the central bank’s rhetoric by removing the word “temporary” from the description of inflation, and in his written remarks, which were repeated at a meeting of the Congressional Finance Committee on Wednesday. The Fed chairman said inflationary pressures “will remain strong over the next year”.
Powell added, however, on Wednesday that tapering was not expected to upset markets.
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Source From: Capital
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