Federal Reserve Chair Powell Discusses Inflation Rates and Potential Effects on Families
With inflation rates in 2021 and 2022 reaching the highest it has been in years, the Federal Reserve is committed to bringing the annual rate of inflation back to 2%. In a hearing with the Senate Banking Committee earlier this week, Federal Reserve Chairman Jerome Powell addressed the potential effects of increased energy production on the inflation rate.
Powell noted that while increased energy production could lead to lower energy prices, the focus was still on core inflation as this is largely driven by demand.[0] Congresswoman Terri A. Britt (R-Montgomery) also addressed the issue of inflation in the hearing, stating that it had driven up costs for American families across the board. Britt noted that the U.S. Department of Labor reported an annual inflation rate of 7% in 2021 and 6.5% in 2022, and the cost of food had gone up 10% in 2022.[0] She expressed concern over the effect this had on families, citing a “kitchen table crisis in every corner of our country.”[0]
In her questioning of Powell, Britt asked if increased energy production in the U.S. would help drive down inflation.[1] She also expressed concerns that increasing capital requirements on financial institutions could have a chilling effect on the economy and the availability of financial services.[0]
The Federal Reserve’s efforts to cool inflation and bring annual price gains back down to 2% have been met with much discussion, but the mission is ultimately subjective. Despite the potential to affect millions of lives, we are still operating with a vague understanding of what “reasonable price stability” looks like.[2]
0. “Katie Britt says inflation has “devastated” hardworking Americans” Alabama Today, 9 Mar. 2023, https://altoday.com/archives/50353-katie-britt-says-inflation-has-devastated-hardworking-americans
1. “Britt addresses ‘kitchen table crisis'” Yellowhammer News, 8 Mar. 2023, https://yellowhammernews.com/senator-katie-britt-speaks-out-against-kitchen-table-crisis/
2. “The Fed’s Inflation Goal Is Completely Arbitrary” FiveThirtyEight, 9 Mar. 2023, https://fivethirtyeight.com/features/why-the-feds-want-2-percent-inflation/
