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Powell to Talk Up Job Gains, Transitory Inflation in Testimony on Hill

Published 06/21/2021, 04:52 PM
Updated 06/21/2021, 04:56 PM
© Reuters.

By Yasin Ebrahim

Investing.com - Federal Chairman Jerome Powell is expected to talk up the prospect job gains in the coming months, but reiterate that the recent notable increase in inflation will likely prove transitory amid an even economy, according to prepared remarks ahead of his testimony Tuesday for the House Select Subcommittee on Coronavirus Crisis.

"Since we last met, the economy has shown sustained improvement," Powell will say in prepared remarks. 

On the labor market job, Powell is expected to say that "job gains should pick up in coming months as vaccinations rise, easing some of the pandemic-related factors currently weighing them down."

"The unemployment rate remained elevated in May at 5.8%, and this figure understates the shortfall in employment, particularly as participation in the labor market has not moved up from the low rates that have prevailed for most of the past year."

Inflation, meanwhile, which has been the subject of much debate has "increased notably" in recent months, but will likely prove transitory, according to Powell's testimony.  As "these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal," Powell is expected to say in testimony.

On the overall economy, Powell will acknowledge that indicators of economic activity and employment "have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades," but bely the strength by highlighting that this "rapid growth reflects the continued bounce back in activity from depressed levels."

Latest comments

The lasting damage of the Federal Reserve’s loose and reckless monetary “policies” will be a longer-term crisis than the pandemic. Powell for prison.
Powell is basically the market now. It's a joke
Your name is a joke
Yasin the ventriloquist or puppet?
Love how they started using the term "transitory inflation" as soon as Biden too office. They are not even trying to hide the 1984-style propaganda anymore.
*took
Lot of economists, even former federal reserve, have been saying that attempting to micromanage the economy as the  Fed is currently doing is futile and does more harm than good.
I should add that the concerning characteristic compared to past periods of hyperinflation is that interest rates are already near zero. They have been unable to raise interest rates since they used that tactic to save the stock market after 2008, and the US has been unable to achieve a surplus or even balanced budget in 20+ years.
Unfortunately, a lot of the population doesn't understand why some programs have to be cut and that loses a party votes.  Nobody cares to learn who pays for it, there are still some fools that think taxpayer money is paying for anything going on right now.  We face a similar problem here in Canada.  One party spends without any consideration for budget and the other is forced to act as an adult and reign it in, yet gets criticized by the uneducated for doing so.
Nothing has changed in 3 years?  Not a single thing?  Are you sure nothing has changed in 3 years, especially the past year and a half that would cause the fed to carefully manage the economy and print more money than had ever been printed in the history of the US?  Things weren't 'okay' during Obama, the inequality gap was widening even then.  Trump was an awful president but Obama wasn't that great himself.
If this will be the content of testimony, it sounds like he's, covering up major issues just to gain more time to somehow find a fix. Unfortunately the more time goes thru sandglass the bigger consequences will be. Let it go FED, admit you failed big time this time.
yes!!
While the Fed Chairman is testifying before Congress, perhaps one of the committee members can kindly ask what would be the impact if the Fed decided to taper its bond buying. Instead of buying $80 billion in bonds each month, what would be the impact if it only bought...say $60 billion in bonds each month?  Further, why is the Fed spending $30 billion each month to buy mortgage-backed securities when we have a booming housing market?  So far, the public has not been provided a detailed explanation as to (1) who determined the amounts that are to be spent each month and (2) what benefits does the public truly gain from this type of QE when we are purportedly in the midst of economic recovery.  The final question is how the Fed is prepared to make a change in its monetary policy in light of the equity markets turning into asset bubbles and the potential of these asset bubbles collapsing when the Fed does formally announce a policy change.
U slow bro remeber when they were buying toxic assets in 2008 well is the same they are just doing it before is call toxic assets and before it crash
Oh man, before 2008 the FED’s balance sheet was under $1T. Now it’s closing in on $9T. We need financial regulation in this country or every market crash will be hyperbolically worse than the last, and after each - the rich get richer and the poor get poorer. Income inequality in America is currently higher than France during the French Revolution.
If the author is right about having the testimony, quite worrysome, and not fair, and disrespectful for congress. Powell should explain this topic.
From where author got copy of Powell testimony? These are confidential documents & not available beforehand in public domain
Translation: The economy is doing terrible, but if we hyperinflate the currency enough it will make the stock market look good for a while...just do not look at the prices of goods/services and cost of living.
Well said Mr. Lewis!!
I live in the UK prices of everthing definately gone up, fuel, food, all types of goods and materials !!
Powell should be in jail
If prefer hanging from a lamp post.
FED guys are so deep in rabbit hole and they know it themselves so now all they do is kick the can
"transitory"
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