Fed Chair Jerome Powell expects the present bigger-than-expected prices in the economy to subside.
- In a testimony before the House Select Subcommittee on the Coronavirus Crisis, Powell says the recent uptick in inflation is related to the economy reopening.
- The Fed chair acknowledges that price pressures might become more persistent than expected.
- Powell encouraged patience in lifting borrowing costs and said they should wait until there is sufficient evidence of actual inflation or related imbalances.
- On whether the US has made “substantial progress,” towards inflation and employment goals, Powell sees gains but not where Fed expects.
- The Fed chair still sees limits on hiring due to fears brought by the coronavirus in the labor market.
- Powell defied questions on whether he would serve another four years as Fed Chair, although he gave an impression of staying on the job.
Fed officials hinted at sooner than expected tapering of the $120 billion bond purchases last week and said it expects to conduct two rate hikes towards the end of 2023.
DXY gains +0.02%, SPY is up + 0.062% on premarket.