Fed Nominees Back Inflation-Fighting Agenda

Containing inflation in the United States, which is at its highest level in decades, must be a priority for the Federal Reserve (Fed), since people “suffer” by rapidly rising prices, said President Joe Biden’s nominees for the central bank’s Board of Governors.

While the Fed has a dual mandate to promote maximum employment and price stability, the clear need right now is to bring inflation down from its highest rate in four decades and return to the soft target of 2% a year, the economist said. Philip Jefferson.

“So right now… the rate of inflation is high relative to the Fed’s target, so the directive is clear“, He said Jeffersoncurrently dean of Davidson Collegein North Carolina, in response to a question from a lawmaker during his confirmation hearing before the Senate Banking Committee.

“The Fed must take action to bring inflation back in line with its target”, he added.

The comment of Jefferson was reiterated by the economist Lisa Cook of the Michigan State Universitywho stated that he agreed “with the Fed’s way right now” and that she was motivated in that sense when seeing the “suffering” of consumers and businesses in the current inflationary environment.

The comments on inflation come as the Fed prepares to raise interest rates next month for the first time since lowering them to near zero about two years ago to shield the economy from the effects of the pandemic.

The remarks indicated that both Jefferson and Cook are willing to support such an effort if they are confirmed to serve on the Fed’s board.

Sarah Bloom Raskin, a former Fed governor nominated by Biden to be vice president of supervision, the central bank’s top banking regulator, also said in written testimony before the hearing that she supports the mission to reduce inflation.

Raskin, however, spent most of the hearing responding to Republican allegations about his approach to bank regulation, saying that while he believes banks need strict oversight, it’s not his job to tell them how or to whom they should hand over. credits.