WASHINGTON (Reuters) -Federal Reserve Chair Jerome Powell pledged "to prevent higher inflation from becoming entrenched" in comments prepared for delivery at a congressional hearing on Tuesday where the high pace of price increases is likely to be a central topic.
Powell did not mention the U.S. central bank's plans to hike interest rates explicitly in brief opening remarks for his nomination hearing before the Senate Banking Committee for a second four-year term as head of the Fed.
But he noted that the strength of an ongoing recovery had pushed the supply and demand for goods and services out of line, with higher prices following.
"The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation," Powell said in his remarks, which were released by the Fed on Monday. "We know that high inflation exacts a toll."
President Joe Biden nominated Powell for a new term as Fed chair, but the appointment must be ratified by the Senate.