Powell: Inflation might not return to Fed’s 2% goal until late next year
By
Zachary Halaschak
July 2, 2024 12:20 pm
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Federal Reserve Chairman Jerome Powell said Tuesday that annual inflation might not return to the Fed’s goal of 2% until late next year or 2026.
The missive came during a moderated conversation with Powell alongside European Central Bank President Christine Lagarde and Banco Central do Brasil Governor Roberto Campos Neto on the sidelines of the annual ECB Forum on Central Banking in Portugal.
“You know, we don’t see ourselves getting back to 2% inflation this year or next year — well, maybe late next year — but in the year after,” Powell said. “The main thing is, we’re making real progress.”
Powell was specifically asked where he thinks inflation will be at a year from now, and he said he expects it to be in the mid-to-low 2% range. He was referring to the headline personal consumption expenditures price index, which is the Fed’s preferred gauge of inflation.
As of May, PCE inflation is clocking in at 2.6%, meaning that the Fed expects inflation to hover around this range for some time, given Powell’s comments. The consumer price index, which is a more widely cited gauge of inflation, is higher and was punching in at 3.3% in May.
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https://www.washingtonexaminer.com/policy/finance-and-economy/3067443/powell-inflation-might-not-return-fed-goal-until-2025/
