When it comes to the central bank’s accommodating monetary policy, investors can rest easy. Federal Reserve Chairman Jerome Powell said yesterday that officials are looking for “substantial further progress” on the economic recovery front before they stop their extensive bond-buying program. They will also keep rates near zero as they wait for that improvement.
He maintained his stance that the inflation surge is temporary, and he noted that much of the increase can be attributed to the used-car industry.
“It’s all kind of the same story,” he said in his testimony before the House Financial Services Committee. “It’s a shortage of semiconductors. There’s also very high demand for various reasons.”
He continued: “It’s just a perfect storm of high demand and low supply and it should pass. Unless we think there’s gonna be a multi-year, many-year shortage of used cars in the United States, we should look at this as temporary. We very much think that is.”
He is slated to testify today before a Senate committee.