Powell reiterates need to control inflation at ECB forum
• Powell said the risks posed by inflation were greater than running into recession
Federal Reserve Chairman highlighted his concerns surrounding rising inflation and stressed the need to not allow inflation to take hold of the US economy over the longer term.
“The risk is that because of the multiplicity of shocks you start to transition to a higher inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening,” Powell said. “We will not allow a transition from a low-inflation environment into a high-inflation environment.”
Powell was speaking at the European Central Bank (ECB) forum along with three of his global counterparts.
On being questioned about an impending recession due to raising interest rates too high, Powell said that he was more concerned about the risk of failing to stamp out high inflation than pushing the economy into a recession.
“Is there a risk we would go too far? Certainly, there’s a risk,” Mr. Powell said Wednesday. “The bigger mistake to make—let’s put it that way—would be to fail to restore price stability.”
Source - CNBC TV
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