Inflation is finally coming down, but Federal Reserve Chair Jerome Powell warned that the U.S. economy is not out of the woods yet.
In a question-and-answer session at the Economic Club of Washington, DC, the nation's top banker said that he expects the process to take some time.
“The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy,” he said. “But it has a long way to go. These are the very early stages.”
The comments track with Powell's previous statements that goods inflation is only part of the run-up in prices, and that services are now one of the biggest drivers of inflation.
Despite Powell sticking to his guns that inflation could be here for a while, stocks got a bump on Tuesday following the comments. Many investors appear to be holding out hope that the Fed will soon pull back on rate hikes, which would give equity markets some room to breathe.
Powell, for his part, stressed that it will likely take another full year for inflation to be brought under control. “We expect 2023 to be a year of significant declines in inflation. It’s actually our job to make sure that that’s the case,” he said.
Still, the Fed has already started moderating its stance. Earlier this month, the Fed announced a 25-basis-point hike, down from 50 basis points enacted at its previous meeting.
Microsoft has announced that it's hired Sam Altman and another co-founder of ChatGPT maker OpenAI after they unexpectedly departed the company days earlier in a corporate shakeup that shocked the artificial intelligence world.
Many factors lie behind the disconnect, but economists increasingly point to one in particular: The lingering financial and psychological effects of the worst bout of inflation in four decades.
Advertisers are fleeing social media platform X over concerns about their ads showing up next to pro-Nazi content, hate speech on the site in general or billionaire owner Elon Musk’s own posts endorsing an antisemitic conspiracy theory.
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The board of ChatGPT-maker Open AI said Friday it has pushed out its co-founder and CEO Sam Altman after a review found he was “not consistently candid in his communications” with the board.
