During a press briefing on Wednesday, Federal Reserve Chair Jerome Powell was asked if the Federal Reserve is willing to have a recession in order to lower inflation rates.
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NewsTranscript
00:00Jennifer Schoenberger with Yahoo Finance.
00:02As you look to navigate higher inflation and lower growth,
00:06the Fed has talked about heeding the lessons from the 1970s.
00:10Is the Fed willing to have a recession
00:12if it means breaking the back of inflation?
00:16CHAIRMAN POWELL.
00:16Well, fortunately, we're in a situation
00:21where we have seen inflation move down from, you know,
00:25higher levels to pretty close
00:27to 2 percent, while the unemployment rate has remained
00:32very consistent with full employment-4.1 percent.
00:35So we now have inflation coming in from an exogenous source,
00:38but the underlying inflationary picture before that was,
00:42you know, basically 2.5 percent inflation, I would say,
00:44and 2 percent growth and 4 percent unemployment.
00:48So that's what we did.
00:50That's what, together, the economy accomplished.
00:54So I don't see any reason to think that we're looking
00:56at a replay of the 70s or anything like that.
00:59You know, inflation-underlying inflation is, you know,
01:02still running in the 2s with probably a little bit
01:05of a pickup associated with tariffs.
01:08So I don't think we're facing-I wouldn't say we're
01:11in a situation that's remotely comparable to that.