{"id":419526,"date":"2022-03-21T23:03:01","date_gmt":"2022-03-21T20:03:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/powell-admits-fed-has-inflation-problem-that-needs-aggressive-action\/"},"modified":"2022-03-21T23:03:01","modified_gmt":"2022-03-21T20:03:01","slug":"powell-admits-fed-has-inflation-problem-that-needs-aggressive-action","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/powell-admits-fed-has-inflation-problem-that-needs-aggressive-action\/","title":{"rendered":"#Powell admits Fed has inflation problem that needs aggressive action"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2f0beac204f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2f0beac204f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/powell-admits-fed-has-inflation-problem-that-needs-aggressive-action\/#%E2%80%9CPowell_admits_Fed_has_inflation_problem_that_needs_aggressive_action%E2%80%9D\" >&#8220;Powell admits Fed has inflation problem that needs aggressive action&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CPowell_admits_Fed_has_inflation_problem_that_needs_aggressive_action%E2%80%9D\"><\/span>&#8220;Powell admits Fed has inflation problem that needs aggressive action&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<\/aside>\n<p>Federal Reserve Chair Jerome Powell spooked investors Monday with an admission that the central bank has an inflation problem that could require an even more aggressive <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach to tamp down inflation than previously expected.<\/p>\n<p>US stocks fell after Powell said the central bank would move \u201cexpeditiously\u201d to address inflation, potentially by raising interest rates more sharply in the future than the quarter-percentage-point hike announced last week. By raising rates at a faster clip this year, the Fed would be dialing down the flow of cheap money that allows bets on riskier assets and fuels higher stock prices.<\/p>\n<p>\u201cPowell is waking everyone up after investors got comfortable with a narrative that the Fed\u2019s got your back,\u201d said Sam Stovall, chief investment strategist at CFRA, Bloomberg reported.<\/p>\n<p>The Dow Jones Industrial Average sank more than 200 points on Monday, or by about 0.6%. The S&amp;P 500, the broadest measure of US stocks, dropped slightly and the tech-heavy Nasdaq fell about 0.4%.<\/p>\n<p>\u201cThe labor market is very strong, and inflation is much too high,\u201d Powell said at the National Association for\u00a0Business Economics conference. \u201cThere is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability.\u201d<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/nyse-03.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Trader on NYSE floor\" class=\"wp-image-21603972\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/nyse-03.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/nyse-03.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/nyse-03.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>US stocks turned lower after the Fed\u2019s Powell indicated the central bank would act \u201cexpeditiously\u201d to address inflation.<\/figcaption><figcaption><span class=\"credit\">Getty Images<\/span><\/figcaption><\/figure>\n<p>Powell added that if Fed officials determined it was \u201cappropriate to move more aggressively by raising the\u00a0federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.\u201d<\/p>\n<p>Inflation surged to a four-decade high of 7.9% in February, far higher than the 2% level the Fed deems acceptable under normal conditions. <\/p>\n<p>The cost of fuel and goods continues to rise \u2014 with experts warning the trouble could get worse if the Russian invasion of Ukraine escalates.<\/p>\n<p>Powell said the Fed would maintain its commitment to keep inflation near 2% \u2014 a level he suggested could be reached within the next three years as the central bank tightens monetary policy.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-04.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Steaks at grocery store\" class=\"wp-image-21603969\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-04.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-04.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-04.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Consumer prices surged 7.9% in February, a four-decade high.<\/figcaption><figcaption><span class=\"credit\">Bloomberg via Getty Images<\/span><\/figcaption><\/figure>\n<p>The Fed\u2019s quarter-percentage-point hike following its meeting earlier this month marked the first increase of its kind in three years. The small-bore increase of only 0.25% soothed investors who\u2019d worried a more-aggressive Fed would stop the flow of cheap money flooding markets. That helped send stocks sharply higher in the wake of last week\u2019s decision.<\/p>\n<p>Now, talk of raising rates at a faster-than-expected clip could rain on the market parade.<\/p>\n<p>\u201cLast week, investors gravitated to a theme of a soft landing, with the Fed as the wizard behind the curtain,\u201d CFRA\u2019s Stovall said. \u201cBut this week, Powell is back saying, \u2018Hold on, the Fed\u2019s main focus is jobs and inflation, and risky assets are secondary.\u2019 Perhaps Powell is trying to steer investor sentiment away from a \u2018buy anything\u2019 mentality, which started to catch fire last week.\u201d<\/p>\n<p>Most Fed policymakers indicated their expectation that interest rates would reach 1.9% by the end of 2022 \u2014 a level achievable through six more quarter-percentage-point hikes this year.<\/p>\n<p>But Powell indicated that plan could change. The central bank will face pressure to act if inflation continues its wild surge in response to the Russia-Ukraine war \u2014 especially if the violence pushes the price of oil and gas even higher.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-01.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Exxon gas station sign\" class=\"wp-image-21604044\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-01.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-01.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/inflation-01.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Experts warn gas prices could continue to rise if the Russia-Ukraine war escalates.<\/figcaption><figcaption><span class=\"credit\">AFP via Getty Images<\/span><\/figcaption><\/figure>\n<p>\u201cIn normal times, when employment and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks,\u201d Powell said. \u201cHowever, the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher, which underscores the need for the committee to move expeditiously as I have described.\u201d<\/p>\n<p>Following the Fed chair\u2019s remarks, US investors projected a 60.7% chance that the Fed will enact a half-percentage-point increase at its May meeting. That was up from 52% before Powell spoke.<\/p>\n<p>Meanwhile, red-hot inflation is costing the average US household an additional $296.45 in expenses as surging food and fuel costs stretch budgets, according to calculations provided to The Post by Ryan Sweet, a senior economist at Moody\u2019s Analytics. He crunched the numbers after the latest\u00a0Labor Department data showed consumer prices jumped 7.9%\u00a0in February. <\/p>\n<p>He arrived at the figure by comparing average US household spending last month to what would have been spent in 2018 and 2019, when inflation paced at 2.1%.<\/p>\n<p><em>With Post wires<\/em>\n                        <\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/03\/21\/powell-admits-fed-has-inflation-problem-that-needs-aggressive-action\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Powell admits Fed has inflation problem that needs aggressive action&#8221; Federal Reserve Chair Jerome Powell spooked investors Monday with an admission that the central bank has an inflation problem that could require an even more aggressive approach to tamp down inflation than previously expected. US stocks fell after Powell said the central bank would move&#8230;<\/p>\n","protected":false},"author":1,"featured_media":419527,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/jerome-powell-03.jpg?quality=90&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[127029,5069,70550,78738,70359,127049],"class_list":["post-419526","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-3-21-22","tag-economy","tag-federal-reserve","tag-jerome-powell","tag-stocks","tag-the-fed"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/419526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=419526"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/419526\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/419527"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=419526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=419526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=419526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}