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Federal Reserve Chairman Jerome Powell said Friday that American households and businesses can expect to experience “pain” as the central bank aims to bring down soaring rates of inflation.
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance,” Powell told policymakers on Friday.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”
Powell added: “These are the unfortunate costs of reducing inflation.”
Powell told central bankers at their annual symposium in Jackson Hole, Wyoming, that the Fed will likely impose more interest rate hikes in the months ahead in hopes of getting inflation under control.
He warned that “a failure to restore price stability would mean far greater pain.”
Investors will likely be disappointed by Powell’s speech since they were hoping that he might signal more moderation in monetary policy.
