Powell says there is 'no guarantee' Fed can tamp down inflation without hurting the job market
Fed chair says failing to stabilize prices puts the economy at greater risk than a recession
Inflation will trickle ‘well into 2023’: Michael Kantrowitz
Piper Sandler chief investment strategist Michael Kantrowitz weighs in on the economy ahead of the GDP update on ‘Mornings with Maria.’
Federal Reserve Chair Jerome Powell warned Wednesday that there is "no guarantee" the central bank will be able to bring inflation to heel without sacrifices in the job market, while reiterating policymakers' aim to achieve a soft landing in their effort to rein in surging prices.
Jerome Powell, chairman of the US Federal Reserve (Photographer: Eric Lee/Bloomberg via Getty Images / Getty Images)
Speaking at the European Central Bank's policy conference in Portugal, Powell said that supply and demand are "really out of balance in many parts of the U.S. economy," and pointed to the labor market as "being a big example of that."
He said those imbalances need to be evened out in order to bring inflation down.
POWELL PLEDGES THE FED IS ‘ACUTELY FOCUSED’ ON TACKLING INFLATION
"We think that there are pathways for us to achieve that, to achieve the path back to 2% inflation while still retaining sustaining a strong labor market. We believe we can do that. That is our aim," Powell said, before adding, "There's no guarantee we can do that."
Journalists follow onscreen the remarks of Jerome Powell, Chair of the Federal Reserve of the United States, in the afternoon panel during the closing day of the 2022 European Central Bank Forum on Central Banking on June 29, 2022, in Sintra, Portuga (Photo by Horacio Villalobos#Corbis/Corbis via Getty Images / Getty Images)
Powell went on to say achieving that is "going to be quite challenging," and that it was made even more difficult by the impacts from Russia's war on Ukraine, which has exacerbated supply chain issues and shortages and caused prices for staples like food and gasoline to surge even higher.
FOURTH OF JULY BBQ PRICE UP $10 ONE YEAR AFTER WHITE HOUSE CELEBRATED 16-CENT DISCOUNT
"It's gotten harder," he said. "The pathways have gotten narrower."
The Federal Reserve building in Washington ((AP Photo/Patrick Semansky, File) / Associated Press)
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The Fed chief also acknowledged that "there is a risk" that the central bank could slow the economy more than necessary to achieve its target of 2% inflation, but he warned that "the bigger mistake would be to fail to restore price stability."