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Powell’s Path to 2% Inflation Needs Luck or, Failing That, Pain

  • Soft landing hinges on prices falling fast as supply improves
  • Relying mostly on Fed policy means much higher unemployment
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WATCH: Powell said the Fed’s commitment to fight inflation is “unconditional” during his testimony before the House Financial Services Committee.Source: Bloomberg

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Federal Reserve Chair Jerome Powell sees two possible paths for the economy and monetary policy over the next year: With some luck, inflation will cool with the help of more supply. And if that fails, the Fed won’t hesitate to impose a more painful solution.