China News Service, December 2, Comprehensive report, recently, Federal Reserve Chairman Powell said that the Federal Reserve needs to be prepared to deal with the situation where inflation may not subside in the second half of 2022 as most people expected.
Data picture: On November 16, local time, the car passed by a gas station in San Mateo County, California, USA. According to the American Automobile Association, the price of gasoline in California hit a record high on the day, with the average price of regular gasoline per gallon soaring to $4.687, ranking first among states in the United States. This is the third consecutive day in California breaking the oil price record. China News Agency reporter Liu Guanguan photo
According to Reuters, Powell reiterated the day after his testimony from the U.S. Congress that he and other policy makers will consider speeding up the reduction of the Federal Reserve's bond purchase plan at the next meeting, a move widely believed to open the door to an early rate hike.
report pointed out that due to very strong consumer demand and continued supply chain problems, the Fed may be close to having to choose between achieving full employment and controlling inflation.
Powell said he believes that as the supply chain is repaired, inflation may fall "significantly" in the second half of 2022, but "the risk of high inflation has risen." "We must use our policies to address a range of seemingly reasonable outcomes, not just the most likely outcomes," he told the U.S. House Financial Services Committee.
The Fed's Beige Book showed that the U.S. economy expanded at a moderate to moderate pace in the first half of October and November, while businesses were coping with rising inflation and labor shortages.
Shortly after Powell and Treasury Secretary Yellen attended a congressional hearing, U.S. public health officials announced the first confirmed case of Omickron strain in the United States.
Although lawmakers did not ask how the Powell Omickron strain might affect the economic outlook or the Fed's policy response, New York Federal Reserve President John Williams said in an exclusive interview with The New York Times that the Omickron strain could cause slowing economic activity and intensify inflationary pressures.
On November 30, Powell also pointed out that the recent rise in the number of confirmed cases of new crown in the United States and the emergence of the mutant virus Omickron strain poses a downward risk to the US economy and employment, and at the same time increases inflation uncertainty. He said greater concerns about the virus could reduce people's willingness to work, which would slow the job market recovery and increase the risk of supply chain disruptions.
Reuters said that U.S. consumer confidence fell to a nine-month low in November due to concerns about rising cost of living and fatigue in fighting the epidemic. The Omickron strain also brings more uncertainty to families and businesses.
Powell admitted that Fed officials are monitoring the changing economic situation and acknowledged that they may face pressure when achieving the dual tasks of full employment and price stability. "When these two goals are in a state of tension, we have to balance them, just like it is now."
Source: China News Network
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