In his much-anticipated remarks on the economy following the Fed’s policy meeting that saw another jumbo interest rate hike to tame soaring prices, Federal Reserve Chair Jerome Powell said inflation was “running too high,” contradicting President Joe Biden’s recent assertion that prices had risen “just an inch, hardly at all.”
Following the rate announcement, Powell spoke to reporters, delivering a sobering message on soaring prices and that cooling red-hot inflation would not be “painless.”
Inflation must be brought down, Powell said, and that could require more than just a “relatively modest increase in unemployment.”
“I wish there was a painless way to do that. There isn’t,” he said at the press conference.
Stark Contrast
The central bank chief also said that various measures of price pressures show that “inflation is running too high.”“We have seen some supply-side healing, but inflation has not really come down. If you look at core PCE inflation, which is ... a good measure of where inflation is running now, if you look at it on a three, six, and 12-month trailing annualized basis you’ll see that inflation is at 4.8 percent, 4.5 percent, and 4.8 percent,” he added.
The president said in the interview that inflation over the past few months “hasn’t spiked” and that the monthly rate of inflation was negligible.
The president replied to Pelley’s question by calling for “perspective” and focusing on the month-over-month rate of inflation in August—which was 0.1 percent—rather than the year-over-year pace of 8.3 percent.
Biden’s remarks on inflation sparked a flurry of critical takes from Republicans and others.