Federal Reserve Chairman Jerome Powell conceded on Wednesday that the Federal Reserve’s battle to bring down inflation could trigger a recession.
Powell told the Senate Banking Committee that achieving a soft landing would be “very challenging.”
Powell and the Fed have been combatting the perception that they would prove gunshy about actually raising rates so much that they could trigger a recession. Until recently, the Fed seemed to prioritize the health of the labor market and ongoing economic expansion over price stability, even going so far as to adopt a framework that let inflation run above the target so long as average inflation over an unspecified time period remained on target.
Several Democratic Senators appeared to caution Powell against tightening the stance of monetary policy too much. S
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