Inflation in the United States
"We know that high inflation is hurting, especially for those who are unable to cover the higher costs of basic necessities such as food, housing and transportation," he said, responding to questions from lawmakers on the US Senate Banking Committee, where a hearing to consider his candidacy for a second term as head of the financial regulator is taking place.
Powell said the US labour market was in a strong position and the economy was "growing at its fastest pace in years". "We can begin to understand that the post-pandemic economy is likely to be different in some respects," he continued. In pursuing our goals, we need to take these differences into account."
The Fed chief reiterated that an increase in the benchmark interest rate could lead to lower inflation. "If we see inflation remaining high for longer than expected and we have to raise interest rates over time, then we will do so," he said.
Many members of the core committee have voiced their support for Powell, who was earlier nominated by US President Joe Biden.
They are expected to recommend it to the full Senate for confirmation in the coming weeks. The upper house of Congress must then give its final approval.
Inflation in the US has soared to its highest level in four decades. Experts expect authorities to report on Wednesday that consumer prices have risen by 7.1 per cent over the past 12 months.
Experts are now predicting that the financial regulator will start raising the benchmark interest rate in March. It is expected to be raised three times in 2022. The Fed kept the rate at 0-0.25% in December.