Federal Reserve Governor Philip Jefferson said on Tuesday that the central bank is determined to combat the painfully high inflation, but warned that the fight to cool consumer prices could take some time.
Jefferson said in Atlanta in his first speech since joining the U.S. central bank as governor in May that we have acted boldly to address rising inflation. My colleagues and I are resolute that we will bring inflation back to 2%. The Federal funds rate was lifted in September to a range of 3.0% to 3.25%, which is near restrictive levels and indicates that more super-sized increases are coming, as the U.S. central bank has embarked on one of the fastest courses in history to raise borrowing costs. One basis point is one hundredth of one percent.
Jefferson echoed that sentiment on Tuesday, saying that inflation is elevated, and this is the problem that concerns me most. He said that it may take some time to recover price stability and it will likely cause a period of below-trend growth.
There is a growing expectation that Wall Street will cause a downturn in the economy, as it raises interest rates at the fastest pace in three decades to catch up with runaway inflation.
Economic growth already contracted in the first two quarters of the year, with gross domestic product, the broadest measure of goods and services produced in a nation, contracting by 1.6% in the winter and has all but conceded that the central bank will tip the economy into a recession with its rapid rate hikes, warning that higher rates will cause economic pain. Powell told reporters in Washington that policy needs to be more restrictive or restrictive for a long time to come. The chances of a soft landing are likely to diminish. We are committed to getting inflation back to 2%. We think a failure to restore price stability would mean far greater pain. The Fed preferred inflation gauge, known as the Personal Consumption Expenditures PCE, in August, shows that underlying inflation pressures are strong, according to new government data released last week.
The Commerce Department said core prices, excluding food and energy, climbed by 0.6% from the previous month and rose by 4.9% on an annual basis.