In a closely watched speech, the Fed chair foreshadowed not only further interest rate increases but also warned that rates might need to stay high for some time to ensure price spikes do not persist.In a closely watched speech, the Fed chair foreshadowed not only further interest rate increases but also warned that rates might need to stay high for some time to ensure price spikes do not persist.
JACKSON HOLE, Wyo. — Federal Reserve Chair Jerome Powell on Friday vowed that he won’t back down in the fight against high inflation, saying the central bank will do what it takes to rein in prices.
In a closely watched speech at the Fed’s annual conference in Wyoming, Powell foreshadowed not only further interest rate increases but also warned that rates might need to stay high for some time to ensure that price spikes do not persist.
“We must keep at it until the job is done,” he said. “Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance.”
The Fed’s campaign to curb the highest inflation in four decades runs the risk of triggering a recession in the world’s largest economy. Growth has already slowed — GDP contracted in the first two quarters of the year — even as inflation has shown signs of cooling off.
