Site last updated: Saturday, January 29, 2022

Log In

Reset Password
MENU
Butler County's great daily newspaper

Fed mulls moves to stem inflation

WASHINGTON — Warning that high inflation could make it harder to restore the job market to full health, Federal Reserve Chair Jerome Powell said Tuesday that the Fed will raise interest rates faster than it now plans if needed to stem surging prices.

With America’s households squeezed by higher costs for food, gas, rent, autos and many other items, the Fed is under pressure to rein in inflation by raising rates to slow borrowing and spending. At the same time, the economy has recovered enough that the Fed’s ultra-low-interest rate policies are no longer needed.

“If we have to raise interest rates more over time, we will,” Powell said during a hearing of the Senate Banking Committee, which is considering his nomination for a second four-year term.

The stark challenge for Powell if he is confirmed for a new term, as expected, was underscored by the questions he faced Tuesday from both Democratic and Republican senators. They pressed him to raise rates to reduce inflation, though without ramping up borrowing costs so much that the economy tumbles into a recession.

Fed officials have forecast three increases in their benchmark short-term rate this year, though some economists say they envision as many as four hikes in 2022.

Powell’s nomination is expected to be approved by the committee sometime in the coming weeks and then confirmed by the full Senate with bipartisan support.