The Federal Reserve underestimated rampant price inflation as the U.S. economy reopened, Chairman Jerome Powell told lawmakers on the House Financial Services Committee on June 23.
“We did underestimate it. With the benefit of hindsight, clearly, we did,” Powell said during his second day of testimony before Congress.
Rep. Ann Wagner (R-Mo.) asked the head of the central bank about what monetary policymakers missed.
He explained that the Fed misread inflationary problems because officials attributed them to supply constraints, because of uncertainty surrounding supply chains and workers returning to the labor market after receiving COVID-19 vaccines. Now, according to Powell, four-decade-high inflation is because of “very strong demand.”…