1/11, 4:34 PM (Source: TeleTrader)
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Powell: Fed to raise rates more if inflation persists

Federal Reserve Chair Jerome Powell said on Tuesday that the Fed will raise interest rates more than planned if inflation persists "at high levels longer than expected." He explained that the United States economy needs to expand for longer in order to achieve a "very strong labor market with high participation," noting that currently, participation "is moving only very slowly." Powell warned that high inflation is "a severe threat to the achievement of maximum employment and achieving a long expansion that will give us that."

Powell also stated the economy is seeing a "mismatch between demand and supply," with very strong demand where supply is constrained, "particularly around things like cars." He explained the issue will be resolved partly by shifts in demand and partly by the return of greater supply, predicting normal supply conditions should return over the course of this year.

Baha Breaking News (BBN) / DJ