Powell stresses that the Fed will not let the economy slide into a higher inflation regime

Federal Reserve Chairman Jerome Powell said the Fed will not let the economy slide into a higher inflation regime even if it means raising interest rates to levels that put growth at risk. Powell said at the annual conference of the European Central Bank in Sintra, Portugal, that regaining control of inflation is necessary, even if that means raising interest rates to levels that push the economy into recession or lead to higher unemployment rates.

Powell stressed that the US economy is still in a very strong state and feels that it will be able to deal with tighter credit conditions while avoiding a recession or even a big rise in the unemployment rate, explaining that the path to the so-called soft landing has become significantly more difficult.