US Federal Reserve: Rising interest rates in a painful way for the economy

US Federal Reserve Chairman Jerome Powell has vowed to use his tools aggressively to tackle inflation that is still near its highest levels in more than 40 years, even if it causes “some pain” for the US economy.

This came in a speech during the annual Jackson Hole conference of the Federal Reserve, in Wyoming, Friday, according to CNBC.

Powell said that fighting the rising inflation in the country will cause “pain for many citizens and businesses,” adding, “But failure to restore stability in prices will lead to more pain”.

According to Powell, higher interest rates will continue to slow the US economy and may lead to job losses.

However, he said the bank will likely continue to raise interest rates.

These comments come amid signs that inflation may have peaked but not showing any noticeable signs of declining.

Powell made a firm commitment to halting inflation, warning that he expected the central bank to continue raising interest rates in a way that would cause “some pain” for the US economy.

He added that the Fed “will use our tools aggressively” to tackle inflation, which is still near its highest levels in more than 40 years.

Even with a series of four consecutive rate hikes totaling 2.25 percentage points, Powell said, “There’s nowhere to pause or pause”.

“While high interest rates, slow growth, and weak labor market conditions will lead to lower inflation, they will cause some pain for households and businesses,” he said in prepared remarks.

“These are the unfortunate costs of lowering inflation,” he said in prepared remarks… But a failure to restore price stability would mean much more pain”.

Stocks fell after Powell’s speech, with the Dow Jones Industrial Average down more than 500 points.

Treasury yields were among the highest levels during the conference.