Federal Reserve Chair Jerome Powell admitted during a panel discussion that lacks understanding about inflation, which is at a 40-year high in the United States.
“I think we now understand better how little we understand about inflation,” Powell said at the European Central Bank’s annual policy forum in Sintra, Portugal, on Wednesday. “This was unpredicted,” he added.
In May, the U.S. annual inflation rate swelled to 8.6 percent, surpassing the market estimate of 8.3 percent.
On a month-over-month basis, the consumer price index (CPI) rose by 1 percent according to the Bureau of Labor Statistics (BLS).
“Is there a risk that we would go too far? Certainly there’s a risk, but I wouldn’t agree that it’s the biggest risk to the economy, I think the bigger mistake to make, let’s put it that way, would be to fail to restore price stability,” Powell said….