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Fed chair vows to adjust US economy 'nimbly' amid risk of 'entrenched' inflation

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
This picture taken on June 22, 2021 shows Federal Reserve Board Chairman Jerome Powell as he testifies on the Federal Reserve's response to the coronavirus pandemic during a House Oversight and Reform Select Subcommittee hearing on Capitol Hill in Washington, DC. (Photo by AFP)

US Federal Reserve Chair Jerome Powell has vowed to fight the staggering inflation rate unprecedented in decades, despite concerns of entrenchment.

In testimony on Tuesday before US lawmakers, who are expected to focus on the recent surge in prices as they consider him for a second term as head of the central bank, he said the Federal Reserve was going to be "very attentive" to the economy and will "adapt pretty nimbly" its policy amid risk of persistent inflation.

In opening testimony to the Senate Banking Committee, Powell claimed recovery from the coronavirus pandemic was “giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation.”

“We know that high inflation exacts a toll,” he added, vowing to use the central bank’s full suite of policy tools “to prevent higher inflation from becoming entrenched.”

However, US consumers expect inflation to get worse, according to the Federal Reserve Bank of New York. 

In 2021, the rate of inflation rose by 6.8 percent, the highest increase since1982.

The cost of energy, including gas, increased by 33 percent, and the price of food went up 6.1 percent.

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