Price pressures seen in narrow range of goods – Powell
Federal Reserve Chair Jerome Powell stated during his speech on Friday that the current spike in prices is seen in a relatively narrow group of products and services, such as durable goods and energy prices that each added nearly 1% to the headline inflation.
From a long-term perspective, the Fed expects the inflation effects to be transitory. Powell also added that as supply shortages ease, the price pressures have begun to even out.
“Policymakers and analysts generally believe that, as long as longer-term inflation expectations remain anchored, policy can and should look through temporary swings in inflation. Our monetary policy framework emphasizes that anchoring longer-term expectations at 2 percent is important for both maximum employment and price stability,” Powell said.
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