Jerome Powell Tells Congress The Fed Is 'Moving Expeditiously' To Fight Inflation

Federal Reserve Chair Jerome Powell rehashed the central bank's desire to cool down inflation on Wednesday as part of a congressionally mandated semiannual report on monetary policy.

What To Know: Powell testified Wednesday in front of the Senate Banking Committee, reiterating the Fed's stance on inflation. 

"At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so," Powell said Wednesday in a statement prepared for the Senate Banking Committee.

"We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses."

Powell highlighted the slowing economic activity in the first quarter, which was driven by "unusually sharp swings in net inventories and net exports" and more than offset continued strong underlying demand.

Recent indicators suggest that GDP growth has picked up in the current quarter and labor demand remains strong, Powell said. Still, the central bank will continue to monitor economic conditions closely, as the Fed chair said he expects the war in Ukraine and COVID-19 lockdowns in China to continue to put upward pressure on inflation. 

"Financial conditions have been tightening since last fall and have now tightened significantly, reflecting both policy actions that we have already taken as well as anticipated actions," Powell said.

The Fed raised interest rates by three-quarters of a percentage point last week in its most aggressive rate hike since 1994.

"Over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2%. We anticipate that ongoing rate increases will be appropriate. The pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy," Powell said.

SPY Price Action: The SPDR S&P 500 (NYSE: SPY) was up 0.51% at $376.96 Wednesday morning. 

Photo: Federalreserve from Flickr.