Taming US inflation to cause some ‘pain’: Fed Reserve Chair

Jerome Powell, Chair of the Federal Reserve

The Federal Reserve has both the tools and resolve to bring down rapid inflation, acknowledging that the path to lower price increases could be a painful one, Chairman Jerome Powell told Marketplace on May 12.

“The process of getting inflation down to 2% will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched,” Powell said.

Consumer prices in the US climbed 8.3%, compared to 8.5% in March. The level is still close to its highest level in 40 years.

The Fed has already begun raising interest rates in March, ahead of deciding a new hike by 50 basis points in May.

“If things come in better than we expect, then we’re prepared to do less … If they come in worse than when we expect, then we’re prepared to do more,” Powell said.

Powell affirmed his expectations for US interest rate hikes by 0.5% in the next two meetings scheduled for June and July, adding that the bank is ready to move in another direction if data are different.