The confirmation comes as policymakers face the highest inflation in a generation and what may be the fastest interest rate hikes since the early 1980s.
With the Senate vote still underway, Powell won bipartisan support for another four-year term as Fed chief, with a count in his favor that exceeds the 51 votes he needed.
US consumer price growth was reported on Wednesday to have slowed sharply in April as gasoline prices fell from record highs, suggesting that inflation may have peaked, though it is possible that remain high for a while and lead to the Federal Reserve maintaining its path of monetary tightening.
But the slowdown is likely to be temporary.
Gasoline prices, which accounted for most of the pullback in the monthly inflation rate, are rising again and hovered around $4,161 a gallon earlier in the week, after falling below $4 in April, according to the Administration. of Energy Information (EIA).
promises blow to inflation
Federal Reserve Chairman Jerome Powell said on Thursday that the US central bank’s battle to rein in inflation “will include some pain” as the impact of rising interest rates is felt, but that the worst The result would be for prices to continue to accelerate.
“We fully understand and appreciate how painful inflation is,” Powell said in an interview with the national Marketplace radio show, repeating his expectation that the Fed will raise interest rates by half a percentage point at each of its next two policy meetings. monetary politics.
At the same time, he promised that if the data turns out to be contrary to what is expected, “we are prepared to do more.”
“Nothing in the economy works, the economy doesn’t work for anybody without price stability,” Powell said. “We went through periods in our history when inflation was quite high … The process of bringing inflation down to 2% will also include some pain, but ultimately the most painful thing would be if we didn’t manage to deal with it and for inflation to take hold at high levels.
Although neither inflation nor borrowing costs are anywhere near Volcker-era levels, the rapidly rising cost of food, gasoline, housing and other basics has become a politically explosive issue for the US government. PresidentJoe Biden. In April, consumer prices were 8.3% higher than a year ago.
“Tackling inflation is my top national priority,” Biden said after Powell’s confirmation by the Senate. The Fed “will bring the skill and knowledge needed at this critical time for our economy and families across the country.”
Powell, who opened a news conference after last week’s monetary policy meeting by saying he wanted to “restore price stability to American families,” used Thursday’s radio interview to get that message across to a broader audience. .