The pressures pushing prices to multi-decade highs are likely to last through the middle of the year, and the US central bank is ready to respond to this risk, but policymakers are committed to extending the economic expansion to promote employment, Federal Reserve chief Jerome Powell said Tuesday.
The world's largest economy is on a strong footing, and with inflation rising and employment recovering.
"The economy no longer needs or wants the very highly accommodative policy" provided by the Fed in response to the Covid-19 pandemic, Powell told lawmakers, underlining the likelihood interest rate increases are coming.
Surging prices for cars, housing and food have become a political liability for Democratic President Joe Biden, who in November tapped Powell, a Republican, to continue in his role as Fed chief for another four years, and also named Fed governor Lael Brainard, a fellow Democrat, to serve as Powell's vice chair.
