Federal Reserve Chairman Jerome Powell delivered his much-anticipated annual Jackson Hole, Wyoming, policy speech today. In it, he made a stern commitment to halting inflation, warning that he expects the central bank to continue raising interest rates in a way that will cause “some pain” to the U.S. economy.
Even with a series of four consecutive interest rate increases, totaling 2.25 percentage points, Powell said this is “no place to stop or pause.”
In a quote from his speech, he said, “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
The remarks come amid signs that inflation may have peaked, running at its highest level in more than 40 years, but is not showing any marked signs of decline.
The stock market fell after the policy speech, with the Dow Jones Industrial Average off more than 507 points, or 1.52%. The S&P 500 fell 1.9% and the Nasdaq Composite slid 2.43%.
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