WASHINGTON (AP) – Federal Reserve Chair Jerome Powell said there’s “no guarantee” the central bank can tame runaway inflation without hurting the job market.
Speaking Wednesday at a European Central Bank forum in Sintra, Portugal, Powell repeated his hope that the Fed can achieve a so-called soft landing – raising interest rates just enough to slow the economy and rein in surging consumer prices without causing a recession and sharply raising the unemployment rate.
“We believe we can do that. That is our aim,” he said. But the Russian invasion of Ukraine, he said, had made the job more difficult by disrupting commerce and driving up the price of food, energy and chemicals.
“It’s gotten harder,” Powell said. “The pathways have gotten narrower.”
ECB President Christine Lagarde echoed the “major impact” of energy shocks, which are rippling worldwide but felt acutely in Europe because of its reliance on Russian oil and natural gas. She also pointed to Europe’s proximity to the war in Ukraine and said how “energy was vastly underestimated” in the bank’s assessment of inflation.