MNI BRIEF: Fed's Powell: Must Prevent Persistent Inflation

Federal Reserve Chair Jerome Powell said Wednesday the central bank must work to prevent a one-time upward hit to prices from tariffs from turning into more persistent inflation pressures, adding officials are well positioned to wait for now before taking any action. 

Our obligation is to keep longer-term expectations and to prevent a one-time increase in the price level from becoming an ongoing inflation problem," Powell said. "The effects on inflation could be short lived reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent. Avoiding that outcome will depend on the size of the tariffs effects, on how long it takes for them to pass fully into prices and ultimately on keeping longer-term inflation expectations well anchored."

He added: For the time being, we are well-positioned to wait for greater clarity."