Inflation is expected to reach 7% at the end of 2021 – then fall steadily
He portrayed those steps as a move away from an ultra-expansionary emergency policy put in place to fight the pandemic, not as a shift to a restrictive stance aimed at cooling off an over-heating economy.
He told the Senate Banking Committee. “It really should not have negative effects on the employment rate.”
Former Treasury Secretary Lawrence Summers are likely to take little comfort from Powell’s words. “There isn’t going to be a path to less inflation without a cooler labor market,” the Harvard University professor and paid Bloomberg contributor said last week.
Bloomberg 11 January 2022