Powell dispels concerns about his fight against high inflation.

Powell dispels concerns about his fight against high inflation.

WyoJACKSON .’s HOLE — Jerome Powell, the chair of the Federal Reserve, promised on Friday that the central bank would take all necessary steps to control prices and that it would not give up the fight against rising inflation.

Powell hinted at future interest rate rises in a speech that was carefully watched at the Fed’s annual conference in Wyoming. He also cautioned that rates may need to remain high for a while to prevent price spikes from lasting.

He answered, “We must continue until the task is accomplished. It will take some time to bring back price stability, and we must use all of our power to balance supply and demand.

The world’s largest economy may enter a recession as a result of the Fed’s efforts to reduce the greatest inflation in four decades. Initial estimates of GDP showed a contraction in the economy in the first two quarters of the year, but growth has already halted and inflation is beginning to moderate.

Republicans in Washington are blaming both the Biden administration’s large spending plans and the Federal Reserve’s protracted decision to raise interest rates for the persistence of high inflation.

In fact, Powell’s views represented a sharp reversal from those he made at the same conference the previous year, when he predicted that rising inflation would probably only continue a short while. His message now aims to discourage financial markets from anticipating the Fed to change direction next year, as well as to warn Americans that economic suffering is coming.

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