Federal Reserve Chairman Jerome Powell is likely to be questioned about inflation at his Senate confirmation hearing.
Federal Reserve Chairman Jerome Powell will face inflation at a Senate confirmation hearing on Tuesday as he will be re-elected as the top U.S. central bank governor.
In prepared remarks released ahead of the hearing, Powell acknowledged that soaring inflation is squeezing American households, especially low-income households, whose incomes have been eroded by rising price pressures.
“We know that high inflation takes its toll, especially for those who cannot meet the higher cost of necessities such as food, housing and transport,” he said.
President Joe Biden November knocked powell Second four-year term as Fed chairman. In his first term, Powell led the economy through the fastest and deepest economic plunge on record in the U.S. during the early months of the 2020 pandemic, and has presided over the recovery since then.
The Fed has kept borrowing costs historically low for much of the recovery, arguing price pressures are “transitory” as it prioritizes putting millions of U.S. jobs out of the first round of lockdowns due to the pandemic people return to work.
But in December, as inflation hit its highest level in nearly 40 years and the labor market saw a near-record number of job openings, Powell drop the word “temporarily” Testify before Congress. Later that month, at the conclusion of the Fed’s last policy-setting meeting in 2021, the central bank took a hawkish turn to curb inflation, suggesting at least three price-cooling rate hikes are likely this year.
Since then, the minutes of the Fed’s December policy-setting meeting, released last week, sparked fears of a rate hike as early as March.
Some economists have called on the Fed to take more aggressive action. In a note to clients on Sunday, Goldman economists led by Jan Hatzius said they now expect four rate hikes this year.
“We continued to see rate hikes in March, June and September, now in December for a total of four hikes through 2022,” they wrote.