Townsville Bulletin

J-pow backed to battle inflation

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THE US Senate has confirmed Jerome Powell to a second term as head of the Federal Reserve.

The vote came with inflation at a 40-year high, fuelled by the conflict in Ukraine and sanctions imposed on Russia, as well as Covid19 restrictio­ns in China that have raised concerns the global supply snarls may worsen.

The Fed chair has said his primary focus is on getting inflation under control, but acknowledg­ed the effort could be painful.

Powell, who joined the Fed board in 2012, led the central bank as it slashed the benchmark interest rate to zero at the start of the pandemic in March 2020 and pumped money into the financial system to prevent a downturn in the world’s largest economy.

Now, he is overseeing efforts to cool price pressures. The Fed last week announced its largest rate hike since 2000 and signalled more increases were on their way.

The challenge for the Fed is to dampen inflation without tipping the US into recession.

While he has expressed confidence the economy is strong enough to withstand the tighter monetary policy, Powell said it will be challengin­g amid the unpreceden­ted global shocks and “may actually depend on factors that we don’t control.” But, Powell said on Thursday, “the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy”.

 ?? ?? Jerome J Powell.
Jerome J Powell.

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