Jerome Powell testifies in Washington, United States before the Senate on Capitol Hill in Federal Reserve June 1, 2020. When would I hear that some of you are not interested in going on new ways of thinking about what you want to do?
The economy in the United States is likely to see a little higher inflation this year as supply constraints push up prices in some sectors, but the Federal Reserve is committed to keep any overshoot within these limits, Fed Chair Jerome Powell said in an April 8 letter.
We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period, '' wrote Governor Rick Scott in a five-page letter responding to a March 24 letter by the Florida Republican raising concerns about rising inflation and the Fed bond buying program. I would, though, emphasize that we are fully committed to both legs of our dual mandate- maximum employment and stable prices.
Powell, who was not on the Senate Banking Committee directly responsible for the Fed, has always been a vocal critic of Scott. He warned that the Federal Reserve's low interest rates and bond buying program will push prices higher, hurting families and businesses.
His office provided Powell's letter to Reuters and suggested the response did not reduce the senator's concerns.
The data shows inflation is rising and Chair Powell continues to ignore this growing problem, Scott's office told Reuters in the email. Senator Scott remains concerned about the impact of inflation on American families of low and fixed income, like his growing up. He is calling on Chair Powell to stand up to this threat, provide a clear plan to address rising inflation and protect American families.
Powell said in his letter that too low inflation limits the Fed's ability to offset economic shocks with low policy and that after a decade of too low inflation, the Fed now aims for inflation moderately above 2%.
Powell described the lessons of the high inflation in the 1960s and 1970s, and the burdens that experience created for all Americans, in the letter. We do not anticipate inflation pressures of this type, but we have the tools to address such pressures if they do arise.