Efforts to lower inflation likely to bring 'some pain', Fed's Powell says
Efforts to bring down inflation would likely cause "some pain" to the economy but not doing so would entail even greater pain, the head of the US central bank said.
In his speech at Jackson Hole, Jerome Powell appeared to largely reiterate his previous positions, adding that lowering inflation would likely require a period of sustained weak growth forceful action on the part of the Federal Reserve and that the overarching aim of policymakers was to bring inflation down.
Powell also said that interest rates needed to go into restrictive territory and be maintained there "for some time".
However, "at some point" the Fed would be able to slow the pace of rate rises.
The Fed chief also welcomed the decline in inflation during the month of July but said it wasn't enough to change the central bank's view.
"The totality of incoming data" would decide by how much the Federal Open Market Committee would raise rates at its 20-21 September meeting.
Underlying momentum in America's economy was described as "strong".
Labour markets were "particularly strong" he said, but "out of balance", although inflation expectations appeared to be "well-anchored".