By Dan McCaleb (The Center Square)
Federal Reserve Chairman Jerome Powell told the Senate Banking Committee on Tuesday that elevated inflation poses a “serious” threat to US jobs and the economic recovery.
He also said that, if necessary, the Fed will raise interest rates higher than initially planned to slow rising prices.
“If we need to raise interest rates more over time, we will,” Powell said. “High inflation poses a serious threat to achieving maximum employment.”
RELATED: December Job Numbers Far Below Expectations, ‘Experts’ Wrong Again
Americans have paid much more for groceries, gasoline and other consumer products in recent months as manufacturing, distribution and other costs have risen.
Producer price index data released in December showed that final demand – the price index for goods and services for producers – rose 0.8% in November alone, from a peak of 9.6% last year.
That’s the largest increase since the federal government began tracking these numbers in 2010.
Support conservative voices!
Sign up to receive the latest political news, insights and commentary straight to your inbox.
At the same time, the consumer price index, a key indicator of inflation, has risen at the fastest pace in nearly 40 years.
The Department of Labor’s Bureau of Labor Statistics released data in December showing that prices have risen 6.8% over the past 12 months.
RELATED: Fed Chair Powell Admits Inflation Will Continue and Rise, And Will No Longer Use The Word “Passive”
Powell said on Tuesday that rising consumer demand coupled with the supply chain crisis are both contributing to higher inflation.
“We can influence the demand side, we cannot influence the supply side. But this is really a combination of the two,” Powell told the committee members.
President Joe Biden nominated Powell for a second term as central bank leader in November. The Senate must reconfirm him.
Syndicated with permission from The Center Square.