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Powell to Flag 'Upside Risks' to Inflation in Testimony on Hill

Published 2021-09-27, 04:58 p/m
Updated 2021-09-27, 04:58 p/m
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com - Federal Reserve Chairman Jerome Powell is expected to highlight of "upside risks" to inflation as bottlenecks, hiring difficulties, and other drivers of price pressures continue, but will continue to suggest these pressures will prove transitory, according to prepared remarks ahead of his testimony due Tuesday for the Senate Banking Committee.     

"As reopening continues, bottlenecks, hiring difficulties, and other constraints could again prove to be greater and more enduring than anticipated, posing upside risks to inflation," according to the testimony.  While these effects have been "larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal."

If, however, the prices pressures prove to be more sustained than expected, and become a serious concern, the Fed would use its "tools to ensure that inflation runs at levels that are consistent with our goal," Powell will say in prepared remarks. 

On the labor market, Powell is expected to say that factors related to the pandemic, such as caregiving needs and ongoing fears of the virus, should "diminish with progress on containing the virus."

Latest comments

Transitory, lol, does he really think wage increases are transitory, once the pnce of goods rise they rarely return to previous levels or the companies shrink the size or the goods and buying power slowly diminishes, left it 6 month too late to slow down incoming inflation
Both JP and Yellen said at the start of 2022 inflation would be back to normal levels, that leaves 3 to 4 months for it to subside
Transitory, lol, does he really think wage increases are transitory, once the pnce of goods rise they rarely return to previous levels or the companies shrink the size or the goods and buying power slowly diminishes, left it 6 month too late to slow down incoming inflation
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