Federal Reserve Chairman Jerome Powell said that the U.S. economy is “in pretty strong shape” as Americans face record inflation, gas prices, and a host of other hardships.
Speaking before a panel at a central banker forum on Wednesday, Powell said that the U.S. economy grew more than 5.5 percent over the past year since it reopened in the wake of the pandemic.
“We had expected this year that growth would moderate to a more sustainable path,” he said. “We also, of course, are raising interest rates, and the aim of that is to slow growth down so that supply will have a chance to catch up. We hope that growth can still remain positive.”
As noted by the Associated Press, Powell had proposed raising interest rates to “just enough to slow the economy and rein in surging consumer prices without causing a recession and sharply raising the unemployment rate.” However, Powell said there was “no guarantee” raising interest rates would help stave off a recession, adding that Russia’s invasion of Ukraine had complicated matters.
Nevertheless, the chairman said that U.S. households “are in very strong financial shape” due to what he referred to as “excess savings” or “forced savings from not being able to travel” during the pandemic.