After steering the U.S. central bank through an unprecedented series of challenges from the pandemic, Federal Reserve Chair Jerome Powell and the Federal Open Market Committee face another critical test: controlling the highest inflation in decades without tipping the economy into a recession.
Last week, the Fed announced the biggest interest hike in 22 years and plans for reducing the Fed’s nearly $9 trillion balance sheet.
“What we can control is demand, we can’t really affect supply with our policies,” Powell told Marketplace host Kai Ryssdal in an interview Thursday. “And supply is a big part of the story here. But more than that, there are huge events, geopolitical events going on around the world, that are going to play a very important role in the economy in the next year or so. So the question whether we can execute a soft landing or not, it may actually depend on factors that we don’t control.”
Ryssdal: Let me start with your most recent press conference. At the beginning, you went out of your way, I think it’s fair to say, to speak directly to the American people — you actually use those words. Do you think you’re getting through to the American people?