Fed's Powell warns slower economic growth may be needed to cool high inflation
Panelists Ben Levisohn, Al Root and Andrew Bary provide insight on the Federal Reserve's moves on 'Barron's Roundtable.'
Federal Reserve Chair Jerome Powell on Thursday lauded recent declines in inflation but warned that consumer prices remain «too high» and a return to pre-pandemic levels may require slower economic growth.
«Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,» Powell said in prepared remarks delivered to the Economic Club of New York. «While the path is likely to be bumpy and take some time, my colleagues and I are united in our commitment to bringing inflation down sustainably to 2%.»
In his highly anticipated speech, Powell walked a careful line about the challenges facing the Fed. Policymakers remain committed to wrangling inflation back to 2%, but are also cognizant about the risks of over tightening and hurting the economy, he said.
Officials voted at the September meeting to hold interest rates steady at a range of 5.25% to 5.5%, the highest level since 2001. However, Fed officials also left the door open to an additional increase this year – and indicated they will hold rates at peak levels for longer than previously expected.
FED CHAIR POWELL ESCORTED OUT OF ROOM AS CLIMATE PROTESTERS INTERRUPT SPEECH
Federal Reserve Chairman Jerome Powell speaks during a meeting of the Economic Club of New York in New York City on Thursday. (Brendan McDermid / Reuters Photos)
Powell indicated Thursday that a recent run-up in long-term Treasury yields, which influence financing costs for households and businesses, could mean the Fed is done tightening.
«Financial conditions have
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