While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring something to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
Jerome Powell discusses the impact of higher interest rates on inflation and the economy.
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without the ability to pay interest on reserves, the Fed would lose control over rates
We're trying to deliver macro stability, financial stability, economic stability for the benefit of all the people.
I have a little more than 10 months left on my term as chair, and all I want, and all anyone at the Fed wants, is to deliver an economy that has price stability, maximum employment, financial stability.
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