Inflation is likely to stay high in the coming months before moderating, Federal Reserve Chairman Jerome Powell is set to tell Congress at a hearing on Tuesday morning.
In testimony released by the central bank on Monday, Powell largely repeated remarks he made at a news conference last week after the central bank indicated it was likely to begin reversing its easy-money policies at its next meeting, Nov. 2-3.
A surge in inflation because of supply-chain bottlenecks and other challenges related to the reopening of the economy has been larger and longer-lasting than anticipated, Powell said in his prepared remarks. “But they will abate, and as they do, inflation is expected to drop back toward” the Fed’s 2% goal, Powell said.
Powell acknowledged that there are risks that price pressures are higher than anticipated or more enduring. The Fed would raise interest rates “if sustained higher inflation were to become a serious concern,” he said.
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