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Fed's Powell says decades-long trend of weak inflation likely won't change from new stimulus - at least not immediately

Posted On: Mar 4, 2021   |   Posted By: Business Insider

Jerome Powell.
Getty Images / Tasos Katopodis
Reopening and new stimulus will likely lift inflation later in 2021, Fed Chair Jerome Powell said.
Still, the uptick will likely be small and only temporary, he added in a Tuesday Senate hearing.
Powell said he expects the tendency for inflation to come in below the Fed's target to linger.
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Additional fiscal stimulus is expected to lift inflation, but the quarter-century trend of weak price growth will likely remain intact, Federal Reserve Chair Jerome Powell said Tuesday. With Democrats plowing forward with efforts to pass a $1.9 trillion stimulus plan, the focus has shifted from the package's elements to its effect on inflation. Where Democrats argue the measure is necessary to fill the hole in the US economy , Republicans have warned the bill will overfill the hole and kickstart a worrying rise in inflation. Several factors stand to accelerate price growth in the near term, Powell said while testifying to...

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