Powell says the Fed won’t be distracted by politics as it moves strongly to bring inflation down

By Greg Robb

‘We will keep at it until the job is done,’ Fed chairman says

Federal Reserve Chairman Jerome Powell said Thursday the central bank won’t be distracted by political criticism as it moves interest rates higher to try to bring inflation down.

“I can also assure you that we never take into consideration external political considerations,” Powell said, during a moderated discussion at a Cato Institute monetary conference.

As the Fed moves interest rates higher, he has had the support of President Joe Biden. But progressive Democrats, including Sen. Elizabeth Warren, Democrat of Massachusetts, have argued that rate hikes are the wrong medicine for high inflation and will cause too much unemployment.

In other remarks, Powell said the Fed accepts its responsibility for price stability, which is 2% inflation over time.

The longer that inflation remains well above target, the greater the risk that the public begins to see higher inflation as the norm, Powell said.

That makes the costs of getting inflation down higher, he said.

“I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done,” Powell said.

U.S. stocks opened lower on Thursday and the yield on the 10-year Treasury note rebounded to be almost unchanged from earlier weakness.

-Greg Robb

(END) Dow Jones Newswires

09-08-22 0937ET

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