Federal Reserve Governor Philip Jefferson said on Tuesday that the central bank is determined to combat painfully high inflation, but warned that the fight to cool consumer prices could take some time.
Jefferson spoke in Atlanta after joining the U.S. central bank as governor in May and said 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 raised in September to a range from 3.0% to 3.25%, a range that is near restrictive, and indicated 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 said on Tuesday that inflation is elevated, and this is the problem that concerns me most. Restoring price stability can take some time and will likely result in a period of below-trend growth, he said.
There is a growing expectation that Wall Street will cause an economic downturn as it raises interest rates at the fastest pace in three decades to catch up with runaway inflation.
Economic growth 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 causing economic pain, as well as higher rates, has all but conceded that the central bank will tip the economy into a recession. The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive or restrictive for longer, Powell told reporters in Washington. We are committed to getting inflation back to 2%. We think that a failure to restore price stability would mean greater pain. The data released last week shows that the preferred inflation gauge, known as the Personal Consumption Expenditures PCE index, was released in August, suggesting that inflationary pressures are strong.
The Commerce Department said that the PCE index showed core prices, excluding food and energy, rose by 0.6% from the previous month and rose by 4.9% on an annual basis.