Federal Reserve Board chairman Jerome Powell on Capitol Hill in Washington. (Graeme Jennings/Pool via AP, File)
OAN NEWSROOM
UPDATED 3: 20 PM PT – Wednesday, May 18, 2022
Federal Reserve Chairman Jerome Powell (R-D.C.) doubled down on the policy of raising interest rates in coming months which may hurt millions of Americans. In an interview Tuesday, the fed chair admitted higher borrowing costs may cause some “pain” to households and businesses.
However, he said it is necessary to curb runaway inflation and their is no way around it. Powell added that he originally hoped the federal reserve could stifle inflation without affecting the labor market but warns unemployment may rise slightly.
“I would love to see a labor market that is more in balance, ideally that would start with the number of vacancies coming down,” said Powell. “Vacancies and quits are at an all time high, that suggests the labor market that’s out of balance. Their are more demands than their are workers. I’d love to see people come back into the labor force, We are seeing some of that now, we’d like to see that continue and we’d love to see the job vacancies come back so that your seeing supply and demand get back together”
He went on to urge Americans not to worry about the labor market claiming the unemployment rate is now near a 50-year low. He further touted the structure of the U.S. economy saying he believes America will come out of the post-pandemic era strong despite the issues driving inflation. He vows to keep fighting inflation until it slows back down to two percent.
“If that involves moving passed their wont be any hesitation about that,” he stated.
Many economists criticized the fed chair for waiting too long before raising rates this year, but he believes his policies were “appropriate”. Some economists says riding fed rates may cause a recession in coming months.
Meanwhile, the Federal Reserve Chairman predicts several shifts in the U.S economy that could slow down the rate of globalization.