Fed Chair Powell and Treasury Secretary Yellen give their testimonies to the Senate Banking Committee on the outlook for inflation.
JEROME H POWELL: The threat of persistently higher inflation has grown. I think-- my baseline expectation is still, as I mentioned, and of most forecasters, is still that inflation will move back down over the course of next year, closer to our target. But clearly the risk of more persistent inflation has risen, and I think you-- what you've seen is you've seen us-- you've seen our policy adapt, and you'll see it continue to adapt. You know, we will use our tools to make sure that higher inflation does not become entrenched.
MIKE CRAPO: I noted in your opening statement that you indicated that inflation pressures will linger well into next year. You do stand by that?
JEROME H POWELL: Yes, I think we can now see certainly through the middle of next year. That's an expectation. You know, forecasting is not a perfect art, as you may have noticed. But yes, right into the middle of next year, and-- you know, that's our expectation, but of course, what's happened is that date has been pushed out repeatedly as supply-side problems have not really improved.
MIKE CRAPO: And if Congress were to pass an additional $2 trillion plus in spending, mixed with a number of increases in taxes, would that add to inflationary pressures?
JEROME H POWELL: Senator, I'm sorry to-- I'll just note that we have a long standing policy of not commenting on active legislation, as you probably aren't surprised to hear.