Powell tells Congress the Fed is ‘strongly committed’ to bringing down inflation

U.S. Federal Reserve Board Chairman Jerome Powell takes questions after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, June 15, 2022.

The central bank has the ability to bring down inflation, according to the chairman of the Fed.

The hardship caused by high inflation is something the Fed understands. The Fed chief said in remarks for the Senate Banking Committee that they are committed to bringing inflation down. The resolve it will take to restore price stability on behalf of American families is something we have.

Powell said that economic conditions are good with a strong labor market and high demand.

He admitted that inflation needs to come down.

Powell said that they would be looking for evidence that inflation is moving down. The pace of those changes will depend on the incoming data and the evolving outlook for the economy.

The war in Ukraine and Covid-linked shutdowns in China are adding to inflation pressures and are not unique to the U.S.

Powell's remarks are part of a congressionally mandated semiannual report on monetary policy.

This is an important time for Fed policy.

The central bank has raised rates by 150 basis points over the past three meetings in order to fight inflation that is running at its fastest annual pace in more than 40 years.

It was the biggest hike since 1994 when the Federal Open Market Committee met.

Powell has said that tighter monetary policy will be an effective tool against inflation, and that the economy is well-equipped to handle higher rates.

The economy has been showing cracks this year that suggest higher rates are on the way.

According to the Atlanta Fed, gross domestic product fell at a rate of 1.5% in the first quarter and is expected to be flat in the second quarter. At a time when inflation-adjusted wages have fallen 3% over the past year, there are signs that the jobs market is slowing down.

Powell and his fellow policymakers have said the rate hikes will go on. Projections released at the meeting last week show that the Fed's benchmark short-term borrowing rate will rise to 3.4% by the end of the year.

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