Powell says inflation will be ‘elevated’

Federal Reserve Chair Jerome Powell says high inflation has been driven by temporary factors, but this time he doesn't repeat an assertion that levels would drop back to the Fed's goal of 2%.

By

National News

July 14, 2021 - 9:14 AM

Federal Reserve Chairman Jerome Powell testifies before the Senate on July 17, 2018, in Washington, D.C. (Douglas Christian/Zuma Press/TNS)

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell says that inflation “will likely remain elevated in coming months” before “moderating,” an apparent acknowledgement that price gains have been larger and more persistent than many economists forecast.

In written testimony to be delivered Wednesday at noon before the House Financial Services Committee, Powell reiterated his long-held view that the high inflation readings over the past several months have largely been driven by temporary factors, such as supply shortages and surging demand, as pandemic-related business restrictions ease. 

Yet Powell did not repeat an assertion he made just three weeks ago before another House panel, that as the trends pushing prices higher faded, inflation would “drop back” to the Fed’s goal of 2%. 

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