Powell: Risk of persistently high inflation has risen
United States Federal Reserve Chair Jerome Powell said on Wednesday that the “risk of persistently high inflation has clearly risen.”
Speaking before the US House of Representatives Committee on Financial Services, he noted that inflation is “clearly” connected to coronavirus pandemic-caused factors and that the vast majority of estimates say that it will go down in the second half of 2022. Previous projections predicted that demand would be strong, but underestimated the problems on the supply side, he revealed, adding that soaring demand can be attributed to both, the fiscal policy as well as a “quickly rebounding economy.”
Powell also stated that wages moved up “significantly,” but not “at a troubling rate that would tend to spark higher inflation.” According to him, the US economic recovery has been the “strongest” among the world’s largest economies.
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