Fed: Powell Downplays Worries About Inflation Risks

The president of the US Central Bank played down concerns about accelerating inflation on Tuesday during a hearing in the House of Representatives.

Asked about the possibility that the US $ 1.9 trillion bailout combined with a potential investment plan of some $ 3 trillion could cause prices to rise, Jerome Powell admitted that inflation, which has been muted for decades. years, would rebound.

“We expect inflation to rise over the course of this year,” said Powell, saying part of that rise will be mechanical and part of it will be driven by a rebound in demand.

But “our opinion is that the effect on inflation will not be particularly large, nor persistent,” he said.

Asked alongside US Treasury Secretary Jerome Powell stressed the need to continue supporting the economy which is “far from fully recovered” from the recession caused by the pandemic.

He insisted that if inflation were to accelerate, the Federal Reserve (Fed) had the tools to deal with it.

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