Also on the speech circuit yesterday was Federal Reserve Chairman Jerome Powell, who said the still-strong labor market could make bringing down inflation more difficult for the central bank than many investors have hoped, according to The Wall Street Journal (subscription).
What’s going on: “A government report Friday that showed hiring accelerated in January was ‘certainly strong—stronger than anyone I know expected,’ Mr. Powell said on Tuesday during a moderated discussion before the Economic Club of Washington, D.C. ‘It kind of shows you why we think this will be a process that takes a significant period of time.’”
- Powell’s talk in Washington comes on the heels of the central bank’s decision last week to raise interest rates for the eighth time in less than a year, to a range of between 4.50% and 4.75%.
- The Fed’s goal is to bring inflation to 2%, a process that is “probably going to be bumpy,” Powell said Tuesday.
- The Fed will likely raise interest rates again, he added.
Why it’s important: The Labor Department “not only reported unusually large job growth in January but—more important for the Fed—it revised previous months’ reported gains higher, suggesting the economy had entered the new year with more momentum than previously thought.”
Point of concern: Continued high inflation in “labor-intensive services” sectors is among the Fed’s most concerning developments, Powell said.