Contrary to President Biden’s confident assertion that current inflation rates are “temporary,” Federal Reserve Chairman Jerome Powell admitted on Wednesday that high inflation could be “more persistent” than expected.
While “inflation has increased notably,” Powell initially tried to remain hopeful. He began by stating that inflation “will likely remain elevated in coming months before moderating,” but he quickly called his own optimism into question.
“The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic,” Powell noted. “As the reopening continues, bottlenecks, hiring difficulties, and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expect.”
BIDEN: Inflation is "expected" and "temporary." pic.twitter.com/vpHdRhcQmW
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Powell stated the obvious, observing that, “The economic downturn has not fallen equally on all Americans.” He added that, “[T]hose least able to shoulder the burden have been hardest hit. In particular, despite progress, joblessness continues to fall disproportionately on lower-wage workers in the service sector and on African Americans and Hispanics.”
Meanwhile, Federalist staff writer Jordan Davidson recently reported that, “American families are struggling to cope with inflation egged on by President Joe Biden’s willingness to pump government cash into the economy.” “What began as surging gas prices and Americans trying to recover from the economic devastation wreaked by government-mandated lockdowns only spread to other goods to create the fastest spike since 2008,” Davidson wrote.
Powell nonetheless tried on Wednesday to convince Americans that he’s confident in the Federal Reserve’s abilities to moderate the situation. “If we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our [inflation] goal [of 2%], we’d be prepared to adjust the stance of policy,” he claimed.
With 86 percent of voters concerned by inflation, Davidson emphasized that “some families can’t afford to wait much longer for prices to fall.”