Jerome H. Powell, the Federal Reserve chair, told lawmakers on Tuesday that a rapidly healing economy no longer needed as much help from the central bank and that keeping inflation in check — including by raising interest rates — would be critical for enabling a stable expansion that benefits workers. From a report: Mr. Powell, whom President Biden recently nominated for a second term as chair, is confronting a complicated economic moment as he moves toward another four-year stint as head of the world’s most powerful central bank. He provided his latest thoughts on the Fed’s challenge during his confirmation hearing before the Senate Banking Committee.
The economy is growing swiftly, but it has been buffeted by repeated waves of the coronavirus and by a surge in inflation that has proved stronger and longer lasting than economists had expected. Workers are finding jobs and winning wage increases, but the rising costs of housing, gas, food and furniture are pinching shoppers and tanking consumer confidence. The Fed is charged with maintaining price stability, and its officials have recently signaled that they could raise interest rates several times this year to try to cool the economy and prevent rapidly rising prices from becoming permanent. Mr. Powell — who is widely expected to win confirmation — reiterated that commitment on Tuesday.