Federal Reserve Chair Jerome Powell on Friday pushed back against concerns that swiftly rising prices could become an enduring feature of the economy, forcing the U.S. central bank to raise interest rates and cut short the recovery.
While recent inflation readings are "a cause for concern," Powell told the Kansas City Fed's annual Jackson Hole economic symposium, responding to what he sees as likely to be a temporary trend by tightening monetary policy could be a "particularly harmful" mistake.
It also sparked criticism from those less sanguine about the risks, with Harvard University's Jason Furman, who was a former senior economic aide in the Obama administration, saying that Powell was "failing to take seriously any arguments on the other side." A number of Powell's fellow central bankers have begun pushing for the Fed's asset purchases to be quickly wound down as the first leg of that process.
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