The inflation picture has become more and more challenging over the course of this year, says Federal Reserve Chairman Jerome Powell.
The Federal Reserve raised the benchmark lending rate by 0.75 percentage point on Wednesday, marking the sixth rate hike this year as red hot inflation continues to ravage the world’s largest economy.
Fed Chair Jerome Powell reiterated the need to bite the bullet and face the pain until inflation comes down to a reasonable level, effectively ruling out a soft landing for the economy. “The inflation picture has become more and more challenging over the course of this year. That means we have to have policy more restrictive, and that narrows the path to a soft landing,” he said.
“The inflation picture has become more and more challenging over the course of this year. That means we have to have policy more restrictive, and that narrows the path to a soft landing.”
A softening of prices is crucial for the Biden administration, which is feared to log a poor performance in the upcoming mid-term elections, but the slew or rate hikes this year by the central bank has not been successful in taming prices so far.
