At a congressional hearing, Federal Reserve Chair Jerome Powell said that the massive stimulus the central bank has been providing was no longer needed as the Fed shifts its focus to fighting inflation and plans to raise interest rates
Jan 11 - Federal Reserve Chair Jerome Powell, in a congressional hearing that pointed to his likely confirmation for a second term as head of the U.S. central bank, said on Tuesday the economy should weather the current COVID-19 surge with only "short-lived" impacts and was ready for the start of tighter monetary policy.
"Inflation is running very far above target. The economy no longer needs or wants the very accommodative policies we have had in place," Powell said in his testimony. But it was largely staid and focused on core economic issues, with Powell offering his fullest comments yet on how the unprecedented rise in coronavirus cases has affected his outlook.
He said he now thinks inflation will ease by the middle of this year, but that the Fed stood ready to tighten borrowing costs as needed to be sure it does. U.S. stocks, which started the year on a weak note as the Omicron variant fueled a surge in COVID-19 cases and investors repositioned for a Fed more intent on containing inflation, rose during Powell's testimony. Yields on shorter-dated Treasury securities fell from pandemic-era highs hit earlier in the day.The hearing was a first step in Powell's expected confirmation to a new four-year term.
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