Fed's Powell says job strength shows inflation fight may last 'quite a bit of time'

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Fed's Powell says job strength shows inflation fight may last 'quite a bit of time'
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Federal Reserve Chair Jerome Powell said on Tuesday the latest U.S. employment report showed the process for getting inflation back near the central bank's 2% target will take 'quite a bit of time' even though there are indications cost pressures are ebbing, at least for goods.

Powell's remarks offered some indication of how he and other policymakers have begun to take stock of an unexpectedly strong jobs market that they had been expecting to weaken as the Fed's rate hikes slow the economy in order to take the wind out of inflation. He was not the first to express surprise at January's level of job creation.

Kashkari, who has been more aggressive than almost all his colleagues in his assessment of how high interest rates need to go, had said a month ago that he forecast the central bank's policy rate should rise to 5.4%. The jobs report consolidated that view. After last week's policy meeting, when the Fed lifted its policy rate by a quarter of a percentage point to the 4.50%-4.75% range, Powell in his repeated references to welcome signs of emerging "disinflation" left investors with the impression he might be open to stopping short on the December rate forecast.

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