In a brief introductory statement prepared to address the Senate Banking Committee, Fed Chairman Jerome Powell said that the Fed will not allow inflation to take hold at a higher level.
"Our political instruments will be aimed at supporting the economy and a strong labor market. We also intend to fight the consolidation of inflation at a higher level," Powell said.
"In addition, it is worth considering that the economy after the pandemic is likely to be different from the one we are used to. In achieving our goals, we will need to take into account these differences," said Powell, who was recently appointed to a second four-year term as head of the Fed.
Fed policymakers, faced with inflation rising to the highest level in almost 40 years, are reducing support for the economy and signaling an imminent rate hike to prevent high inflation from taking hold in the economy. According to FOMC forecasts, this year the rate may be increased three times.
In his statement, Powell also positively assessed the Fed’s supervisory and financial oversight work over the past four years.