Jerome Powell says Fed is resolved to fight inflation even if it brings economic pain

Federal Reserve Chair Jerome Powell speaks during a news conference following a Fed policy meeting in Washington, D.C., on July 27. Powell warned on Friday the central bank is committed to bring down inflation even if it causes some economic pain. Drew Angerer/Getty Images hide caption

toggle caption Drew Angerer/Getty Images

Federal Reserve Chair Jerome Powell speaks during a news conference following a Fed policy meeting in Washington, D.C., on July 27. Powell warned on Friday the central bank is committed to bring down inflation even if it causes some economic pain.

Drew Angerer/Getty Images

Federal Reserve Chairman Jerome Powell gave a clear signal that the central bank will continue raising interest rates to fight inflation in his highly anticipated speech at Jackson Hole, Wyoming.

The comments are intended to show the Fed is committed to fighting inflation, even if it causes an economic slowdown.

“We will keep at it until we are confident the job is done,” Powell said in a speech that lasted less than 10 minutes, while also warning that “restoring price stability will take some time.”

However, Powell s acknowledged higher interest rates could bring economic pain.

“Reducing inflation is likely to require a sustained period of below-trend growth,” he said. That will “bring some pain to households and businesses. These are the unfortunate costs of reducing inflation.”

But Powell added that “failure to restore price stability would mean far greater pain.”

The Fed has already raised interest rates by over 2 percentage points this year, and it’s expected to raise rates again by either half a percentage point or three-quarters of a percentage point at its next meeting in September.