Both the Fed and the Biden administration have said rapid price increases are being stoked by temporary factors.
Federal Reserve Chair Jerome Powell will warn lawmakers Wednesday that inflation is likely to remain high for months before cooling down, in the wake of hotter-than-expected price increases in May and June.
“Inflation has increased notably and will likely remain elevated in coming months before moderating,” Powell says in his prepared testimony to the House Financial Services Committee.
Both the Fed and the Biden administration have said rapid price increases are being stoked by temporary factors, such as hiccups in the faster-than-expected reopening of the economy. But Powell hadn’t previously indicated how long he thinks that what he calls “transitory” inflation might last.
His remarks suggest that while the central bank still sees the pace of price increases as temporary, they could last a while. Treasury Secretary Janet Yellen said in May that she expects inflation to remain elevated through the end of the year.
On Tuesday, the Labor Department reported that the consumer price index rose 5.4 percent in June from the same month last year, the biggest jump since 2008 and higher than expected, feeding fears that the Fed might have to intervene sooner than projected.
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Federal Reserve Chair Jerome Powell plans to warn lawmakers today that inflation is likely to remain high for months before cooling down, in the wake of hotter-than-expected price increases in May and Junehttps://t.co/K9SGrykPff
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BREAKING: Democrats unveil $3.5T go-it-alone plan to fulfill Biden’s agenda pic.twitter.com/hMerO7uKKW
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