Advertisement

Fed Chairman says inflation 'may take longer than expected' to lower

By Chris Benson
Federal Reserve Chairman Jerome Powell testifies at the Senate Banking, Housing, and Urban Affairs hearing in March at the Dirksen Senate Office Building in Washington, DC. At the time, Powell said it was still too early for the central bank to consider interest rate cuts as he stated the next day how the economy “is growing at a healthy, sustainable, solid, strong pace.” Photo by Jemal Countess/UPI
1 of 2 | Federal Reserve Chairman Jerome Powell testifies at the Senate Banking, Housing, and Urban Affairs hearing in March at the Dirksen Senate Office Building in Washington, DC. At the time, Powell said it was still too early for the central bank to consider interest rate cuts as he stated the next day how the economy “is growing at a healthy, sustainable, solid, strong pace.” Photo by Jemal Countess/UPI | License Photo

May 14 (UPI) -- The Federal Reserve Chairman on Tuesday said "it may take longer than expected" for inflation to get under wraps as he gave no indication of a pending interest rate cut.

"We did not expect this to be a smooth road," Fed Chair Jerome Powell said at a Foreign Bankers' Association annual meeting held Tuesday in Amsterdam, the Netherlands.

Advertisement

Powell admitted the United States' inflation numbers "were higher than I think anybody expected" as he maintained that next steps should be to "be patient and let restrictive policy do its work."

His words echo similar ones expressed earlier this month when the Federal Reserve voted to keep interest rates the same to stay in line with expectations as inflation remained above the central bank's 2% threshold.

In March, Powell told a House Committee that it was still too early for the central bank to consider interest rate cuts as he stated to a Senate Committee the next day how the economy "is growing at a healthy, sustainable, solid, strong pace."

In February, wholesale inflation went up 0.6%, which was higher than economists had expected with little difference in April while in March the United States' inflation rate had risen to 3.5%.

Advertisement

But Powell seemed to stay cautious despite original optimism at lowering interest rates this year and lower-than-expected jobs numbers.

"Is inflation going to be more persistent going forward?" he said Tuesday in Amsterdam.

"I don't think we know that yet," he stated as he said there is also a "need" for "more than a quarter's worth of data to really make a judgment on that."

Latest Headlines