Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. ECONOMY
July 14, 2021 02:32 PM

Powell expects inflation to moderate as Fed stays course

Brian Croce
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Jerome Powell, chairman of the Federal Reserve, speaks during a House subcommittee hearing
    Bloomberg
    Fed Chairman Jerome Powell

    Although conditions in the labor market have improved over the first half of the year, the Federal Reserve is closely monitoring the recent increase in inflation and plans to continue its monthly purchases of Treasuries and mortgage-backed securities, Chairman Jerome Powell said Wednesday.

    Job gains should be strong in coming months as labor demand remains high, but the "pandemic-induced declines in employment last year were largest for workers with lower wages and for African Americans and Hispanics," Mr. Powell said during his semi-annual monetary policy report before House Financial Services Committee. "Despite substantial improvements for all racial and ethnic groups, the hardest-hit groups still have the most ground left to regain."

    Inflation will likely remain elevated in coming months before moderating, Mr. Powell said, pointing to strong demand in sectors where production bottlenecks or other supply constraints have limited production that has led to rapid price increases for some goods and services. "The very high inflation readings are coming from a small group of goods and services that are directly tied to the reopening of the economy — it's new cars, used cars, rental cars, hotel rooms, airplane tickets," Mr. Powell said in response to a question from Rep. Ann Wager, R-Mo.

    In assessing the appropriate stance of monetary policy, the Fed will continue to assess incoming data and is "prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal," Mr. Powell said.

    The Fed, which issued its Monetary Policy Report July 9, will also continue its monthly purchases of $80 billion of Treasuries and $40 billion of mortgage-backed securities until "substantial further progress" was made on inflation and employment, Mr. Powell said.

    When asked by Rep. Carolyn Maloney, D-N.Y., about what Mr. Powell would need to see before supporting tapering the Fed's asset purchases, he said it's "very difficult to be precise about it because with maximum employment there are no three or four or five or six metrics that you can point to. It really is a very broad range of things, including wages, unemployment, levels of employment, participation."

    He was also asked about the Fed's work on climate change, to which he responded that it's part of the central bank's pre-existing mandates for supervising financial institutions and the overall stability of the financial system. Mr. Powell added that the Fed is currently "in the beginning stages of working up a program that will engage with financial institutions" to ensure institutions are aware of, and capable of, handling risks, including risks from climate change.

    The Fed has kept the target range for its benchmark policy rate unchanged at zero to 0.25% since March 2020. The Federal Open Market Committee is scheduled to meet July 27-28. Mr. Powell is to testify before the Senate Banking Committee on Thursday.

    Related Articles
    Fed officials see progress toward taper move – minutes
    Fed Beige Book reports pickup in recovery, price pressures
    Fed urged to start discussing tapering timeline
    Recommended for You
    FedReserveSculpture_i.jpg
    Cooler inflation takes next Fed rate-hike size down to the wire
    BankofEngland2022
    BOE delivers 50-basis-point rate hike and recession warning
    Christine Lagarde
    Europe teetering on edge of another crisis
    Private Markets
    Sponsored Content: Private Markets

    Reader Poll

    August 10, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Gaining Momentum: Where Next for Trend-Following?
    The market opportunity in U.S. residential mortgage-backed securities
    Credit Indices Evolve with Enhanced Data Inputs
    Hedge Funds 2.0: Back to the future
    How Has 2022's Carnage Reshaped Global Stock and Bond Markets?
    Crossroads: Politics, Inflation, & Bonds
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    August 1, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit