The Consumer Price Index ticked up in June, thanks in large part to higher energy prices.

On the one hand, inflation didn't peak in May. Powell and his colleagues on the Federal Open Market Committee are closely tracking economic data, but they have been mixed. emerged from the darkest days of the pandemic, but it can't fix supply chain issues or end the war in Ukraine, both of which have led to higher prices, especially of gasoline and food.Įconomy continues to create jobs, but housing has slowed The central bank is equipped to deal with demand, which surged as the U.S. In June, inflation rose by 9.1% from a year earlier, and the Fed is tackling a problem that is shaped by factors outside of its control. The Fed would like those adjustments to happen in a measured way, but that is easier said than done. As policymakers continue to raise rates, growth will slow further, and the unemployment rate, which is close to its pre-pandemic low, will rise. But this isn't a precise or painless process.

To do that, the Fed is ratcheting up interest rates. 'Our overarching focus is using our tools to bring inflation back down to our 2% goal and to keep longer-term inflation expectations well anchored.' 'We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses,' Powell told the Senate Banking Committee last month. Although it will be difficult to achieve what economists call a ' soft landing' for the economy, Powell sounded a confident note in recent testimony before Congress.

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