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Reopening economic bottlenecks could be “more enduring” By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO – Federal Reserve Chairman Jerome Powell speaks during a U.S. House Oversight and Reform Select Subcommittee hearing about the coronavirus crises, which took place on Capitol Hill in Washington. June 22, 2021. Graeme Jennings/Pool via REUTERS/File Photo

WASHINGTON (Reuters) – The higher prices and hiring difficulties seen as the U.S. economy reopens from the pandemic could prove “more enduring than anticipated,” and the Federal Reserve would move against unchecked inflation if needed, Fed chair Jerome Powell said in remarks prepared for delivery to the Senate banking committee on Tuesday.

As was the shutdown, the process of reopening America’s economy has been unprecedented. As reopening continues, bottlenecks, hiring difficulties, and other constraints could again prove to

be greater and more enduring than anticipated, posing upside risks to inflation,” Powell said. If sustained higher inflation became a major concern, Powell said that the Fed would definitely respond and employ its tools to keep inflation at levels consistent with our goals.

Powell reiterated key messages from last week’s Fed policy meeting, which included that the Fed expects strong economic growth to continue in the current year, despite some slowing due to the Coronavirus Delta strain.

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