Powell on Interst Rates22 Jun 2021 21:55
WASHINGTON, June 22 (Reuters) - Federal Reserve Chair Jerome Powell on Tuesday reaffirmed the U.S. central bank’s intent to encourage a “broad and inclusive” recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation.
"We will not raise interest rates preemptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances," Powell said in a hearing before a U.S. House of Representatives panel.
Recent price increases "don't speak to a broadly tight economy" that would require higher interest rates, Powell said, but come from categories "directly affected by reopening" of the economy.
In setting upcoming monetary policy, the Fed chief also said the central bank would keep its eyes focused on a broad set of labor market statistics, including how different racial and other groups are faring.
"We will not just look at the headline numbers for unemployment," Powell told the members of the House Select Subcommittee on the Coronavirus Crisis. "We will look at all kinds of measures ... That is the most important thing we can do" to ensure the benefits of the recovery are more fully shared.
Lawmakers pressed Powell on how the Fed was balancing rising inflation risks with its promise to ensure the economy recovers all the jobs lost after the onset of the coronavirus pandemic.
"We have unstable employment and higher inflation," said Representative Jim Jordan, an Ohio Republican, referring to the Fed's congressionally-mandated goals of ensuring maximum employment and stable prices. "Something has to give."
https://www.reuters.com/business/us-lawmakers-likely-press-powell-feds-hawkish-turn-2021-06-22/
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