'People really don’t like inflation,” said Federal Reserve Chair Jerome Powell on...
Federal Reserve chair Jerome Powell speaks during a news conference, Wednesday, Feb. 1, 2023, at the Federal Reserve Board in Washington.The Federal Reserve is seeing progress in its ongoing war against inflation, Chair Jerome Powell said Wednesday in announcing another interest rate hike, the eighth since March and part of the central bank's strategy to help curb price increases.
Inflation as measured by the Fed's preferred metric, the personal consumption expenditures price index, stood at 5 percent in December, according to data released by the Bureau of Economic Analysis last week. That's down from 7 percent in June 2022 but still close to 40-year highs and well above the Fed's long-term goal of 2 percent.
Powell on Wednesday reiterated his view that bringing down inflation is likely to require a period of subdued economic growth as well as some softening of labor market conditions. Neither has yet come to pass.Gross domestic product , the total value of goods and services produced and consumed in the United States and one measure of economic health,
The markets did some seesawing on Wednesday as investors parsed Powell's comments, although the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite Index all ticked slightly up by the end of the trading day, perhaps thanks to Powell's observation that the"disinflation process has started." Disinflation refers to a decrease in the inflation rate; deflation would mean that prices are actually getting lower.
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