Federal Reserve Chair Jerome Powell said Monday the central bank is inclined to look past the energy shock from the war in Iran, noting that supply disruptions have historically been short-lived and that longer-term inflation expectations remain well anchored despite the conflict.
Speaking to undergraduate economics students at Harvard University, Powell said the standard central-banking response to energy shocks is to wait them out rather than react with policy changes. He said that despite the sharp rise in oil prices since the outbreak of hostilities, the public’s expectations about inflation over the longer term appear to be “well…
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