U.S. Federal Reserve Chair Jerome Powell said on Monday that the central bank will use its tools to prevent higher inflation from becoming entrenched while supporting the economic recovery.
"The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation," Powell said in a written testimony prepared for delivery at his confirmation hearing before the Senate Banking Committee on Tuesday.
"We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation," Powell said, adding the central bank is "strongly committed" to achieving its statutory goals of maximum employment and price stability.
"We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched," Powell said.
U.S. President Joe Biden announced in November that he intended to nominate Powell for a second term as Fed chair and to nominate Fed governor Lael Brainard as vice chair.
"I'm confident that Chair Powell and Dr. Brainard's focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before," Biden said in a statement.
The U.S. consumer price index rose 6.8 percent in the 12-month period ending in November, the fastest annual pace in almost 40 years, according to the U.S. Labor Department.