The Center Square

Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come.

Testifying before Congress, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year.

“As always, in assessing the appropriate stance of monetary policy, we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal,” Powell said in his prepared testimony.

“In addition, we are continuing to increase our holdings of Treasury securities and agency mortgage backed securities at least at their current pace until substantial further progress has been made toward our maximum-employment and price-stability goals,” he added. “These purchases have materially eased financial conditions and are providing substantial support to the economy.”

Powell’s testimony comes on the heels of troubling news of a major spike in inflation. The Bureau of Labor Statistics released federal data showing the largest one-month spike in consumer prices in more than a decade.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May…” BLS said. “This was the largest 1-month change since June 2008 when the index rose 1.0 percent. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.”

That data was the latest in months of troubling economic reports that drove lawmakers to press Powell. Despite Powell’s push for calm, many Republicans were not convinced.

“Democrats’ socialist stimulus is already causing skyrocketing inflation and trillions more in wasteful spending would only make it worse,” Mike Berg of the National Republican Congressional Committee said.

Inflation, though, is not the only economic indicator worrying economists. Elevated unemployment despite widespread job availability has led Republican governors around the country to push back against supplemental federal unemployment benefits passed by Congress earlier this year. The payments, $300 weekly on top of state unemployment benefits, have made it easier to stay at home than return to the workforce, according to Republicans.