On Tuesday, Federal Reserve chair Jerome Powell told US lawmakers that the latest economic data has come in stronger than expected which suggests the interest rate level will be higher than previously anticipated.
Senators responded with a broad set of questions and pointed criticism around whether the Fed was diagnosing the inflation problem correctly and whether price pressures could be tamed without significant damage to economic growth and the job market. Democrats on the committee focused on the role high corporate profits may be playing in persistent inflation.
Republicans focused on whether energy policy was restricting supply and keeping prices higher than needed, and whether restrained federal spending could help the Fed’s cause.
Inflation has fallen since Powell’s last appearances in congress. After topping out at an annual rate of 9.1 percent in June, the consumer price index dropped to 6.4 percent in January.