Rising US prices Fed chief is dampening Inflation concerns
Status: 23.06.2021 9:39 a.m.
The head of the US Federal Reserve sees the reason for the current high inflation primarily in the recovery of the economy. The unexpectedly strong effects would soon fade, Powell said.
By Torsten Teichmann, ARD studio Washington
The demand in many industries is greater than the supply, meanwhile the prices for raw materials in the USA are rising, employers are having difficulties filling positions: All these effects of the economic upswing at the end of the corona pandemic are stronger than assumed, the head of the Federal Reserve (Fed), Jerome Powell, granted. Nevertheless, there will be no inflation, as in the 1970s, Powell said at a hearing in the US House of Representatives. “These factors will fade over time and we will get back to where we want to go. We are watching this carefully,” he said.
Interest rate hikes planned for 2023
The goal is an inflation rate of just over two percent. In May there was inflation at five percent . The Fed announced last week by the end of 2023, the key interest rate is expected to be increased in two steps to want. But in the short term it remains in the range between 0 and 0.25 percent. Powell had to defend his monetary policy at the hearing in the House of Representatives. Republican MP Steve Scalise accused a visibly annoyed Fed chief that the cheap money policy was harmful to hard-working families.
Steve Scalise criticized Fed policies as harmful to families. Image: REUTERS
Powell replied that lower income groups in particular have not yet benefited from the upswing in the United States. “Real incomes at the lower end of the spectrum are stagnating compared to those at the top,” he said. “Mobility across all income groups has decreased in the US and is now behind that in most other industrialized countries.”
June 16, 2021
The sound becomes sharper Fed sees two rate hikes in 2023
As expected, the US Federal Reserve left its key interest rate unchanged.
Fed expects economic growth of 6.5 percent
These differences would hold back the US economy and the country as a whole. And that although the Fed is currently assuming that the US economy will grow by 6.5 percent this year with the help of the government’s trillion-dollar stimulus packages