Federal Reserve Chairman Jerome Powell is determined to get inflation down and will do whatever it takes to achieve that end, he said in a livestreamed interview with the Wall Street Journal at the newspaper’s Future of Everything Festival.
“If that involves moving past broadly understood levels of neutral we won’t hesitate to do that,” Powell said. “We will go until we feel we’re at a place where we can say financial conditions are in an appropriate place, we see inflation coming down.
“We’ll go to that point. There won’t be any hesitation about that.”
The Fed chairman reiterated that his goal is to get inflation rates down to about 2%. It was above 8% in April. The Fed will begin dumping some of the $9 trillion in bonds it bought over the course of the COVID pandemic and will continue raising interest rates. The moves have led to stock market downturns and predictions of a recession. Powell said the Fed’s actions are likely to increase the unemployment rate, which sits at 3.6%, but that the economy can take it.
“You’d still have a strong labor market if unemployment were to move up a few ticks,” he said. “I would say there are a number of plausible paths to have a soft as I said softish landing. Our job isn’t to handicap the odds, it’s to try to achieve that.”
The Fed next meets June 14-15 and will likely raise interest rates again after hikes totaling 75 basis points so far this year.
“There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings,” Powell said May 4 after the last meeting.
“There could be some pain involved to restoring price stability” he told the WSJ.