Fed Watch

CPI Comes In Above Expectations, Powell Confirmed

As inflation remains near its fastest rate in nearly 40 years, the Federal Reserve continues to signal its hawkish stance for 2022. Inflation began to accelerate last spring, but Fed policymakers initially thought price gains would quickly fade. Though it became clear in the fall that fast inflation was proving to be more lasting, the Fed pivoted toward rapidly removing policy support only in late November and didn’t raise rates until March.

Some Federal Reserve officials have begun to acknowledge that they were too slow to respond to rapid inflation. That delay is forcing them to constrain the economy more abruptly. Jerome Powell, the Federal Reserve chair, said this week that lowering inflation is likely to be painful, but that allowing price gains to persist would be the bigger problem. Powell, whom Senators confirmed to a second four-year term at the head of the central bank in an 80-19 vote on Thursday, holds one of the most consequential jobs in the United States and in a world economy with rapid inflation and deep uncertainty.

Consumer prices climbed 8.3 percent in April from the previous year, according to data reported on Wednesday. The Fed has already begun raising interest rates to try to cool the economy, making its largest increase since 2000 when it lifted ...

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