Federal Reserve Chair Jerome Powell defended the need to continue raising interest rates despite the potential impact on jobs during his testimony before Congress on Thursday. At the beginning of the second day of his testimony, Powell was questioned by Democratic Senator Sherrod Brown, who chairs the Senate Banking Committee, regarding the possibility that the central bank's efforts to control inflation could disproportionately result in job losses for individuals from racial minorities.
Brown stated, "What the Federal Reserve Governors describe as a 'cooling' of the strong labor market is perceived by the public where I live as layoffs." Powell responded, "Working families suffer more directly and quickly from inflation," adding that officials currently believe "it would be appropriate to raise interest rates again this year, possibly twice, assuming the economy performs as expected."
Jerome emphasized that the way to lower interest rates is to be confident that inflation is decreasing, stating, "We do not expect that to happen anytime soon. The test for that is to be confident that inflation is coming down to our target of two percent."
