BUSINESS

Federal Reserve chair vows to bring inflation under control

Written by admin

Federal Reserve chair vows to bring inflation under control

“Mortgage rates will go up, car loan rates – all those rates that affect consumers’ buying decisions,” Mr. Powell said of the way higher rates would work. “Housing prices won’t rise as much, and equity prices won’t rise as much, so people will spend less.”

The goal is to allow factories and businesses to hold on so that buyers no longer compete for the limited stock of goods and services available, creating shortages that enable companies to raise prices without scaring away vengeful buyers.

See also  Stocks, oil and businesses react to Ukraine-Russia war: live news

“What we hope to achieve is bringing the economy to a level where supply and demand are in sync,” Mr. Powell said.

Asked whether the country could be on the cusp of a wage price spiral, in which wages and inflation feed off each other, Mr. Powell said in a cautious tone.

“This is a serious concern, and one that we are monitoring carefully,” Mr. Powell said, noting that wage increases are very rapid – especially for low-wage workers – and that whether they would become problematic It will depend on how frequent they prove to be.

“The big thing we don’t want is for the roots of inflation to become more self-perpetuating,” he said. “So we are moving forward with our program to raise interest rates and bring inflation under control.”

Mr Powell underlined that the Fed’s plan for policy would be “agile” in response to the uncertainty coming from Ukraine. Economists have said the conflict is likely to raise the prices of gas and other commodities, leading to further inflation – already, oil prices have gone up. But at the same time, the combination of high fuel costs and fluctuating consumer sentiment could be a drag on economic growth.

But he clarified repeatedly that it was important to put price gains back on the line.

“We need to provide price stability; We are not currently doing that,” Mr. Powell later called the central bank “very motivated to get the economy back to a place where we have inflation under control, but also a stronger economy and a stronger labor market.” Is. ,

See also  Nightlife Inflation: Why Beverage Prices and Entry Fees Are Rising

#Federal #Reserve #chair #vows #bring #inflation #control

About the author

admin

Leave a Comment

%d bloggers like this: