Fed chief Jerome Powell is likely to be shaken during his Senate confirmation hearing on inflation.
Federal Reserve Chairman Jerome Powell will face a second term as the top central banker in the United States during his Senate confirmation hearing on Tuesday.
In prepared remarks released before the trial, Powell acknowledged how rising inflation is hurting U.S. households, especially low-income ones who see a larger portion of their income being eroded by rising price pressures.
“We know that high inflation takes a toll, especially for those who are less able to cover the higher costs of necessities such as food, housing and transport,” he said.
President Joe Biden in November Powell getik to serve a second four-year term at the helm of the Fed. During his first term, Powell managed the economy through the country’s fastest and deepest economic dive on record during the opening months of the pandemic back in 2020, and has since led its recovery.
For most of the recovery, the Fed has kept borrowing costs at historic lows, with price pressure as ‘perishable’, as it has prioritized bringing back the millions of Americans who lost their jobs after the pandemic’s initial round of restrictions. let work.
But in December, with inflation running at its hottest rate in nearly 40 years and flooding the labor market with an almost record number of jobs, Powell retired the word “perishable” in testimony before Congress. Later that month, at the end of the Fed’s final 2021 policy-making meeting, the central bank took a false move to curb inflation, suggesting that at least three price-cooling interest rate hikes could be on the cards this year.
Since then, minutes of the December Fed policy meeting released last week have sparked the specter of an interest rate hike taking place as soon as March.
And some economists are calling for even more aggressive Fed action. In a note to clients Sunday, Goldman Sachs economists led by Jan Hatzius said they now see four interest rate hikes taking place this year.
“We continue to see hikes in March, June and September, and have now added a hike in December for a total of four in 2022,” they wrote.