Fed chief Jerome Powell does not agree with President Joe Biden on inflation.
At a press conference on Wednesday, Powell said that inflation has not fallen, directly contradicting the president’s assertion on 60 Minutes over the weekend that inflation had fallen and prices were now rising “just an inch, hardly at all.”
“If you really look at this year’s inflation—three, six, and 12 month trailing—you see inflation is running too high. It’s running 4.5 percent or above. You don’t need to know much more than that,” Powell said.
Powell went on to say that this was not where the Fed expected or wanted inflation to be at this point. The Fed had thought that resolving supply chain issues would bring down inflation but so far there is little evidence of that.
“We have seen some supply side healing but inflation has not really come down,” Powell said. “If you look at core PCE inflation, which is a good measure of where inflation is running now, if you look at it on a three, six, and 12 month trailing basis, you’ll see that inflation is at 4.8 percent, 4.5 percent, and 4.8 percent.”
Powell indicated that the high level of inflation indicated that the Fed could press on with its aggressive interest rate increases.
“What that tells us is that we need to continue, and we can keep doing these—and we did today, another large increase—as we approach the level we think we need to get to. And we’re still discovering what that level is,” Powell said.