Powell: We have to use our policy to address a reasonable set of outcomes

Federal Reserve Chairman Jerome Powell said that with the strong growth of the US economy and the persistence of imbalances between supply and demand in the foreseeable future, policy makers should be prepared to respond to the possibility that inflation does not subside in the second half of next year as expected.

Powell said on the second day of his testimony in Congress that policy will need to adapt as officials seek to put millions of Americans back to work while ensuring that the recent rise in inflation does not take root. "Almost all forecasters expect inflation to decline significantly in the second half of next year," Powell said. "The point is, we can't act as if we were sure of that. We have to use our policy to address the set of reasonable outcomes, not just the most likely."