In June, the U.S. annual inflation rate surged to a 13-year high of 5.4 percent, coming in higher than most estimates. Even on a month-over-month basis, the consumer price index (CPI) edged up 0.9 percent, more than double the market forecast.
Most Wall Street surveys anticipate that inflation will run hotter for longer, potentially for at least another year.
But do not tell the Federal Reserve this.
Speaking in prepared remarks to the House financial services committee, Fed Chair Jerome Powell insisted that inflation will moderate, meaning that the central bank will not taper down the institution’s ultra-aggressive money-printing blitzkrieg.
“Conditions in the labor market have continued to improve, but there is still a long way to go,” he said. “Job gains should be strong in coming months as public health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish.”
“Despite substantial improvements for all racial and ethnic groups, the hardest-hit groups still have the most ground left to regain,” Powell added.
How out of touch is the Eccles Building?
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