WASHINGTON, March 18 (Reuters) – Federal Reserve Chair Jerome Powell said on Wednesday that the current U.S. economic situation, even with the Iran war-induced spike in energy prices was far removed from the “stagflation” of the 1970s, with current inflation only one percentage point above target and low unemployment. I would reserve the term stagflation […]
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Powell says ‘stagflation’ is a 1970s term, not what we face today
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WASHINGTON, March 18 (Reuters) – Federal Reserve Chair Jerome Powell said on Wednesday that the current U.S. economic situation, even with the Iran war-induced spike in energy prices was far removed from the “stagflation” of the 1970s, with current inflation only one percentage point above target and low unemployment.
I would reserve the term stagflation for, you know, a much more serious set of circumstances. That is not the situation we’re in,” Powell told a news conference after the Fed held policy rates steady.
“What we have is some tension between the goals and we’re trying to manage our way through it,” Powell added. “It’s a very difficult situation, but it’s nothing like what they faced in the 1970s and I reserve stagflation for that — the word — for that period. Maybe that’s just me.”
(Reporting by David Lawder)