Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Fed's Powell sees inflation lingering, risks from COVID

11/29/2021 | 05:01pm EST
FILE PHOTO: Jerome Powell testifies on his nomination to become chairman of the U.S. Federal Reserve in Washington

(Reuters) -U.S. Federal Reserve Chair Jerome Powell on Monday said he continues to expect inflation to recede over the next year as supply and demand come into better balance, but warned that the new strain of COVID-19 muddies the outlook, and prices could continue to rise for longer than earlier thought.

"It is difficult to predict the persistence and effects of supply constraints, but it now appears that factors pushing inflation upward will linger well into next year," Powell said in testimony prepared for delivery Tuesday at the U.S. Senate Banking Committee, and released Monday by the Fed.

The economy continues to strengthen, and the labor market to improve, pushing up wages, he said.

But the recent rise in COVID-19 cases and the emergence of the new Omicron variant "pose downside risks to employment and economic activity and increased uncertainty for inflation," he said, noting that health-related concerns could "reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions."

The Fed this month began reducing its support for the economy by gradually decreasing its asset purchases at a pace that would end them by next June.

But with inflation registering more than double the Fed's 2% target, Fed officials have increasingly said they are open to potentially speeding up the taper to clear the way for earlier interest rate hikes if needed.

Powell did not mention the taper timeline in his prepared remarks, though he did say the labor market has "ground to cover" before reaching full employment, one of the conditions the Fed has set before it will consider raising interest rates from their current near-zero levels.

The Fed, Powell promised, "is committed to our price-stability goal" and will use its tools both to support the economy and the labor market and to "prevent higher inflation from becoming entrenched."

(Reporting by Ann Saphir;Editing by Dan Burns and Rosalba O'Brien)

By Ann Saphir


ę Reuters 2021
Latest news "Economy & Forex"
05:59pCanada hopeful table potato shipments will resume in weeks to Puerto Rico, U.S. mainland
RE
05:56pBiden vows to nominate Black woman to U.S. Supreme Court by end of February
RE
05:55pFed signals intent to join the great central bank stimulus exit
RE
05:47pRussia, U.S. keep door open to Ukraine diplomacy, but big gaps remain
RE
05:47pStormy Daniels testifies ex-lawyer Avenatti 'stole from me'
RE
05:47pAmerica Movil dips on pay TV permit snag, minor impact seen
RE
05:39pHome Depot picks veteran Ted Decker as new CEO
RE
05:33pEuro Lost 0.85% to $1.1146 -- Data Talk
DJ
05:33pThe WSJ Dollar Index Rises 0.67% to 90.74 -- Data Talk
DJ
05:33pSterling Lost 0.61% to $1.3383 -- Data Talk
DJ
Latest news "Economy & Forex"