Chair of the Federal Reserve on Wednesday while testifying before the House Financial Services Committee.
Powell noted he sees a quarter-percentage point increases coming. However, he is open to the possibility of moving interest rate more aggressively if inflation persists.
In his appearance before the House he acknowledge “tremendous hardship” surrounding war between Russian and Ukraine.
“The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely,” Powell said.
“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain,” he added. “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.”
Later, he said the Fed wants to get inflation under control, but “the bottom line is that we will proceed but we will proceed carefully as we learn more about the implications of the Ukraine war on the economy.”
Such observations comes as inflation in the U.S. runs at 40-years high and further dcomplicated by rallying oil prices due to Russia-Ukraine tensions.
The observations come amid 40-year highs for inflation in the U.S., complicated by a Ukraine war that has driven oil prices to around their highest levels in a decade. Consumer prices increased 7.5% from a year ago in January, and the Fed’s preferred inflation gauge showed its strongest 12-month gain since 1983.
“We will use our policy tools as appropriate to prevent higher inflation from becoming entrenched while promoting a sustainable expansion and a strong labor market,” he said.
“We have phased out our net asset purchases. With inflation well above 2 percent and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month.”
