The Federal Reserve will consider pulling back economic support sooner “as the threat of persistently high inflation has grown,” chair Jerome Powell said during a congressional hearing on Tuesday.
Why it matters: This is the biggest signal yet the Fed is backing away from its stance that soaring prices would be fleeting — a change that could shift its policies that underpin the economy.
Catch up quick: Up until now, Powell has taken a hard line that elevated inflation would be “transitory” — a word that should now be retired, Powell said on Tuesday.
What they’re saying: Powell signaled the Fed at its next meeting would consider accelerating the winddown of the gargantuan bond purchases supporting the recovery — something critics warn are contributing to overheating the economy.
What’s next: The Fed’s next two-day policy meeting wraps up on Dec. 15.