FED Chairman Jerome Powell finally acknowledged that inflation is on the rise. Along with the new COVID variant concerns, these issues are leading to the market reacting negatively today.
The Omaha World-Herald reported this morning:
Federal Reserve Chair Jerome Powell says that the appearance of a new COVID-19 variant could slow the economy and hiring, while also raising uncertainty about inflation.
The recent increase in delta cases and the emergence of the omicron variant “pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell says in prepared remarks to be delivered to the Senate Banking Committee Tuesday. The new variant could also worsen supply chain disruptions, he said.
Powell’s comments come after other Fed officials in recent weeks have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cited concerns about inflation, which has jumped to three-decade highs.
Yet Powell’s remarks suggest that the additional uncertainty raised by the omicron variant may complicate the Fed’s next steps.
“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Powell said.
According to Banking Journal, in June Powell shared that the inflation was transitory:
Testifying before a House hearing today, Federal Reserve Chairman Jerome Powell said that a recent rise in inflation is transitory and that a “perfect storm” of strong demand and weak supply due to the reopening of the economy is a substantial cause.
“These effects have been larger than we expected, and they may turn out to be more persistent than we expected, but the incoming data are very much consistent with the view that these are factors that will wane over time and then inflation will move down toward our goals,” Powell told the Select Subcommittee on the Coronavirus Crisis.
Yahoo reports that Powell has now decided to stop using the word ‘transitory’:
The nation’s economic steward said it will back off of using the word “transitory” to describe the fast pace of price increases, as Federal Reserve policymakers acknowledge the increasing risk of more persistent inflation.
“We tend to use [the word transitory] to mean that it won’t leave a permanent mark in the form of higher inflation,” Fed Chairman Jerome Powell told Congress on Tuesday. “I think it’s probably a good time to retire that word and try to explain more clearly what we mean.”
Of course, Powell has a track record of doing and saying many wrong things.
At least Powell is making money during these times.
The post FED Chair Powell Finally Retires Word ‘Transitory’ Regarding Inflation (at a 3-Decade High) – Now Concerned About New COVID Variant appeared first on The Gateway Pundit.