The Strategist

Fed chief admits it's time to stop calling inflation temporary

12/01/2021 - 08:22

Fed chief Jerome Powell has admitted that it is time to stop calling inflation temporary.

Kurtis Garbutt
Kurtis Garbutt
"The word 'temporary' has different meanings to different people, for many it has the meaning of 'fleeting' and we use it in the sense that it will not leave a permanent mark in the form of higher inflation. 

I think now is probably a good time to drop that word and start explaining more clearly what we mean," Powell said at a Senate hearing in response to a question about when he would stop using the word "temporary" in reference to inflation.

Previously, US inflation has risen sharply due to the economic recovery, the injection of funds by Congress and the Fed, and supply chain disruptions. Inflation in October 2021 stood at 6.2% year-on-year, the highest rate of inflation in 30 years.