Federal Reserve Chairman Jerome Powell said on Wednesday that inflation remains “too high” and has a “likely bumpy” and “long way” to go until it reaches the intended two percent, where the Fed would like it to be.
“Inflation remains too high, and the labor market continues to be very tight,” Powell said at the press conference following the Fed increasing interest rates by a quarter of a percent (25 basis points) on Wednesday. “The process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy.”
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Breitbart News noted before the press conference that the Fed was stuck between a rock and a hard place when contemplating raising interest rates by a quarter of a percent since it could likely make banks struggle more with liquidity and cause more bank failures. However, if the Fed had not increased the rates, it would have also likely fueled inflation more.
While reviewing the inflation numbers during the press conference, Powell explained that “longer-term inflation expectations appear to remain well anchored” and noted the “Fed’s monetary policy actions are guided by our mandate to promote maximum employment and stable prices for the American people,” he added.
The federal reserve chairman noted that there needs better “price stability” before the country is able to have strong labor market conditions, but went on to say that consumer spending has appeared to pick up after the economy significantly slowed last year.
Powell also stated that the labor market is currently “extremely tight.” He acknowledged that job gains have increased over the last three months, with the unemployment rate remaining at 3.6 percent in February.
However, with the low unemployment rate, he acknowledged that the labor demand exceeded the available workers’ supply. Powell estimated that the unemployment rate would be at 4.5 percent at the end of the year and would be 4.6 percent at the end of the following year.
Jacob Bliss is a reporter for Breitbart News. Write to him at jbliss@breitbart.com or follow him on Twitter @JacobMBliss.