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Powell returns to inflation after leaving the ‘transitory’ tag | Business and Economic Affairs

The Fed chief told U.S. lawmakers Wednesday that although many economists see inflation slowing in the middle of next year, ‘We cannot do that if we are convinced of that.’

Federal Reserve chief Jerome Powell’s hawk interior reopened its wings Wednesday, a day after telling lawmakers in the United States that it might be time to rest the word “change” in reference to rising prices.

In a second day of testimony before Congress on Wednesday, Powell said that although many economists see prices falling by next year, “we cannot do this unless we are convinced of this.” He added: “Iinflation has been steadily higher and higher than we expected. “

On Tuesday, U.S. markets traded and the dollar grew against other currencies after Powell indicated that the Fed could accelerate the withdrawal of bond purchases that helped hide long-term interest rates on the coronavirus. If the Fed accelerates its purchasing power bonds, interest rates could rise much faster than expected.

The Fed has been pushing for Americans to return to work at a time when they are recovering from inflation because they have seen inflation this year as the short-term consequences of the global financial crisis are reopening many.

But Powell on Tuesday pointed out that a change is taking place in the Fed’s mindset.

While the US labor market has not yet done all of the jobs that closed last year, it is so strong that Americans are abandoning their jobs in their account. And weekly demands for unemployment benefits are down to 52 years.

American companies are also struggling to fill the vacancies that are about to open, with many offering promotions and benefits to attract needy workers.

While businesses spend a lot of money on workers and equipment, the money is donated to US consumers. In October, consumer prices rose sharply in 30 years.

On Wednesday, Powell also said that the Fed does not see any evidence of so-called “inflation” growing. It is the cycle in which fuel payments lead businesses to continue raising prices, prompting employees to apply for a raise elsewhere.

“We’ve seen the pay rise sharply,” Powell said. “We don’t see it rising at an alarming rate that could lead to a rise in inflation, but it ‘s something we are looking at.”

Although they had to deal with rising prices, consumer spending was strong in October. But inflation is destroying consumer perceptions about their financial expectations and the income they earn.

Consumer confidence plummeted in November after a slight rise last month, the Convention Council said Tuesday.

And now Omicron is introducing more economic uncertainty.




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