07 December, 2021

My Forecast Is Simple: Inflation Remains High

In Remarks To Congress, Powell Says Omicron Complicates Inflation Forecasts | The Daily Wire

Powell, acknowledging that the inflation rate is running “well above” the Fed’s 2% long-run target, told members of the Senate Banking Committee:

Most forecasters, including at the Fed, continue to expect that inflation will move down significantly over the next year as supply and demand imbalances abate. It is difficult to predict the persistence and effects of supply constraints, but it now appears that factors pushing inflation upward will linger well into next year. In addition, with the rapid improvement in the labor market, slack is diminishing, and wages are rising at a brisk pace.

We understand that high inflation imposes significant burdens, especially on those less able to meet the higher costs of essentials like food, housing, and transportation. We are committed to our price-stability goal. We will use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.

The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. 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.

You want less uncertainty? Stop panicking with each new variant. Open up the country. Open up the economy. Stop putting blockers like vax mandates in front of the economy. Stop closing pipelines. Stop making it harder for businesses to succeed. Then the uncertainty will go away along with inflation and unemployment.


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