(Washington) The chairman of the US Federal Reserve said on Tuesday that ending the exceptional monetary support to the US economy would not have a negative impact on the job market, stressing that the priority was to regain stability prices.
Posted at 11:37 am
“It really is time for us to start moving from a pandemic emergency to a more normal level,” Jerome Powell said during his confirmation hearing in the Senate. “This shouldn’t really have negative effects on the job market,” he added, noting that employment was dynamic.
“The job market is recovering incredibly quickly” from the crisis into which the COVID-19 pandemic had plunged him in the spring of 2020, he said.
In December, unemployment fell to 3.9%, returning to close to its pre-pandemic level (3.5%), he observed.
But he acknowledged that the return to work of some of the employees remained difficult. Job offers are also bloated, but many people are not coming back to work.
For now, the threat of inflation is the most worrying, he continued, justifying the string of interest rate hikes coming this year.
And if the inflationary surge were to continue beyond the middle of the year, “we will react accordingly,” he added, hinting that the Fed would not hesitate to raise rates more aggressively.
“The return to normal will take time,” he also warned, while interest rates are close to zero.
“To ensure sustainable expansion, we must have price stability,” he also recalled.
Consumer prices in the United States rose in November at a rate not seen in nearly 40 years, to 6.8% last month compared to November 2020.
That’s a far cry from the Fed’s 2% target considered healthy for the economy.
Data for December will be released on Wednesday.