The Federal Reserve is "strongly committed" to controlling inflation but there remains hope it can be done without the "very high social costs" involved in prior inflation fights, Fed chair Jerome Powell said Thursday.
Referring to former Fed chair Paul Volcker's battle against inflation in the early 1980s, when Fed policy triggered a recession and the unemployment rate topped 10%, Powell said in comments at a Cato Institute conference Volcker was trying to uproot years of rising inflation expectations. Volcker "followed several failed attempts," to lower inflation, Powell said.
"My colleagues and I are strongly committed (to lowering inflation)...We think we can avoid the kind of very high social costs that Paul Volcker and the Fed had to bring into play."
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