On Tuesday, Federal Reserve Chair Jerome Powell spoke at the Economic Club of Washington, D.C. and discussed the recent jobs report, which showed stronger-than-expected job growth. Powell stated that the report highlights the fact that bringing inflation down will be a bumpy process and will take a significant period of time. Despite the positive job growth, Powell did not indicate that the Fed would be more aggressive with their actions. Instead, he emphasized the need for further interest rate increases to control inflation.
Powell also highlighted that inflation, which was 6.5% in the year through December, will be a slow process and not as smooth as some may have hoped. He added that the Fed is focused on price pressures within the services sector, which may be more affected by a tight labor market and pass on the increased costs to consumers.
In the aftermath of the jobs report, financial markets initially rallied, but then saw a reversal after bond yields rose. Powell acknowledged that financial conditions have tightened and stated that ongoing rate hikes will be appropriate. When asked about his salary, Powell responded that it was around $190,000 a year and that he believes it to be a fair amount.
