| Federal Reserve Chairman Jerome Powell said on Tuesday that he expects a series of interest rate hikes this year and “at some point perhaps later this year we will start to allow the balance sheet to run off." Some Republican senators also expressed worries over whether the Fed was veering too far from its stated objectives of price stability, full employment, and banking oversight. Many of the questions to Powell from both sides of the Senate aisle centered on inflation, which is running at a close to a 40-year high, but he insisted the surge is "transitory". “If we see inflation persisting at high levels longer than expected, then if we have to raise interest more over time, we will,” Powell said. |
U.S. consumer prices post the biggest rise in nearly 40 years; inflation close to peaking
CPI surges 7.0% year-on-year.
Washington DC, Jan 12 (Reuters).- U.S. consumer prices increased solidly in December as rental accommodation and used cars maintained their strong gains, culminating in the largest annual rise in inflation in nearly four decades, which bolstered expectations that the Federal Reserve will start raising interest rates as early as March.
The report from the Labor Department on Wednesday followed on the heels of data last Friday showing that the labor market was at or near maximum employment.
Fed Chair Jerome Powell on Tuesday said the U.S. central bank stood ready to do what was necessary to keep high inflation from becoming "entrenched," in testimony during his nomination hearing before the Senate Banking Committee for a second four-year term as head of the bank.
The high cost of living, the result of snarled supply chains because of the COVID-19 pandemic, is a political nightmare for President Joe Biden, whose approval rating has taken a hit.
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