“It is very, very unlikely” that US inflation will move towards those conditions of hyperinflation that characterized the 1970s and early 1980s, when inflation shot up above 10%. Federal Reserve Chairman Jerome Powell said this in response to questions from Subcommittee Republicans about the US House of Representatives coronavirus crisis.
“We believe that what we are seeing now – explained Powell – is inflation in particular categories of goods and services that are directly affected by this unique historical event that none of us have ever experienced before,” the number said. one of the Fed.
Powell added that the current situation is caused by “extremely strong demand for labor, goods and services” and the fact that “the supply front has been caught a little off guard.”
Powell vowed that the Fed will be vigilant in its role. “You have a central bank that is committed to ensuring price stability, which has defined what price stability is and which is highly prepared to use its tools for inflation of around 2%. All these factors suggest to me that an episode similar to the one we witnessed in the ’70s… .I really don’t think anything like that could happen ”.