Fed officials say high inflation weighing on consumers and needs to be controlled
Federal Reserve officials said on Tuesday they are vigilant of the ways that higher inflation can affect U.S. households and dampen consumer sentiment and want to get it under control.
While wages are rising for some workers, consumer sentiment is down to a "level that you might associate with a recession," said Richmond Fed President Thomas Barkin, citing the consumer sentiment survey from the University of Michigan.
"I think that's very much because of the impact that prices have on people," including those who spend a significant part of their pay on food and gas, Barkin said during a virtual panel organized by the Fed.
Atlanta Fed President Raphael Bostic said the central bank aims for low inflation because it doesn't want households to stress about rising prices. "That's one of the reasons why, you know, I think you've heard from all of us concerns about the higher levels of inflation that we've seen recently and the need to get that back under control," Bostic said.
Federal Reserve officials, including Chair Jerome Powell, have maintained that inflation is transitory and likely to moderate next year.
St. Louis Federal Reserve Bank President James Bullard said on Tuesday that the Fed should "tack in a more hawkish direction" over its next couple of meetings to prepare in case inflation does not begin to ease.
Fed's Daly: next step for Fed is forward guidance
San Francisco Federal Reserve Bank President Mary Daly on Tuesday said now that the Fed has begun to taper its asset purchases, the next step is to tweak the communications the Fed gives about the future path of rate hikes.
Fed's Daly: stock-price euphoria reflects post-pandemic hopes
San Francisco Federal Reserve Bank President Mary Daly said Tuesday that stock prices are “euphoric” but that at bottom they reflect optimism about the post-pandemic future.
· Fed's inflation debate heats up as Biden nears Fed chair pick
A public debate among Federal Reserve policymakers over how to respond to high inflation intensified on Tuesday, even as U.S. President Joe Biden neared a decision about who will lead the central bank for the next four years.
Biden, who is weighing whether to keep Jerome Powell as Fed chair for another term or elevate Fed Governor Lael Brainard to the post, said Tuesday he would make the final call in about four days.
As if to illustrate the challenges that either leader would face in crafting a policy consensus, San Francisco Federal Reserve Bank President Mary Daly on Tuesday called for central bank patience, saying price pressures will likely fade on their own as the pandemic recedes.
· Biden says he will make final decision about Federal Reserve chair in about 4 days
U.S. President Joe Biden said on Tuesday he will make a final decision in about four days on his nominee to head the Federal Reserve, a critical choice for the first-term Democrat and one that could well have a bearing on how his economic agenda plays out.
Reference: Reuters, CNBC
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