Federal Reserve Chair Jerome Powell said longer-term inflation expectations
remain “well anchored beyond the short term,” while officials monitor risks
stemming from the US and Israel’s war with Iran. Speaking at Harvard University,
Powell said policymakers may need to respond to economic effects but not yet.
“We don’t know what the economic effects will be,” he said, adding the Fed must
“carefully monitor inflation expectations.” He noted inflation remains above the
2% target and highlighted policy tension: “There’s sort of downside risk to the
labor market… but there’s upside risk to inflation.”
