Reply To: Traders Market Weekly: Bear Jitters as Risk Factors Deepen

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Federal Reserve Chairman Jerome Powell said the central bank’s resolve in combating the highest inflation in 40 years shouldn’t be questioned, even if it requires pushing up unemployment.

“Restoring price stability is a nonnegotiable need. It is something we have to do,” Mr. Powell said in an interview Tuesday during The Wall Street Journal’s Future of Everything Festival. “There could be some pain involved.”

He said that it seemed the unemployment rate consistent with stable inflation “is probably well above 3.6%.”

The Fed chairman repeated his hope that the central bank can curtail high inflation without spurring a large rise in unemployment. However, Mr. Powell said, there is little from modern economic experience to suggest that outcome can be achieved. “If you look in the history book and find it—no, you can’t,” he said. “I think we are in a world of firsts.”

“The fact that everyone is so strong going into this should hopefully provide a cushion such that whatever recession there is, if there is one, is short and not all that deep,” he said.

“I would say there is no disagreement really. It is a challenging task, made more challenging the last couple months because of global events,” he said. “It is challenging because unemployment is very low already and because inflation is very high.”