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Powell Says Inflation Could Go Through Next Year

This is Not the Peak
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EDITOR'S NOTE: So much for “transitory” inflation. The long-held buzzword of the Federal Reserve that suggested inflation would be temporary isn’t being thrown around by the Fed anymore. This week, Fed chairman (for now) Jerome Powell told Reuters, “Supply constraints and elevated inflation are likely to last longer than previously expected and well into next year, and the same is true for pressure on wages.” He also said that “if we were to see a risk of inflation moving persistently higher, we would certaintly [sic] use our tools,” but the head central banker failed to commit to any concrete monetary policy. 

Oct 22 (Reuters) - Federal Reserve Chair Jerome Powell said on Friday that the U.S. central bank is “on track” to begin reducing its purchases of assets, and noted that he expects inflation to abate next year as pressures from COVID fade.

“Supply constraints and elevated inflation are likely to last longer than previously expected and well into next year, and the same is true for pressure on wages,” Powell said in a virtual appearance. The most likely case is for inflation pressures to abate and job growth to resume its pace from this past summer, he said, but “if we were to see a risk of inflation moving persistently higher, we would certaintly use our tools.”

Reporting by Ann Saphir, Lindsay Dunsmuir

Originally posted on Reuters.com.

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