Powell: "Inflation and Supply Chain Issues Will Persist"‥NY Stock Market Ends Mixed

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), forecasted that supply chain bottlenecks and high inflation will continue into next year. Following Powell's remarks, the U.S. stock market closed mixed.

On the 22nd (local time), Powell spoke at a virtual conference hosted by the Bank for International Settlements (BIS), stating, "The inflation rate is far exceeding the target."

Powell predicted, "Supply shortages and high inflation seem likely to last longer than previously expected. They will continue into next year," and also anticipated that wage pressures will persist.

Although Powell had previously emphasized that the rise in inflation was temporary, he now expects inflation to be driven higher due to ongoing supply chain bottlenecks.

He diagnosed, "The supply-side shortages have worsened," adding, "The risk of prolonged supply chain bottlenecks has become clear. This will lead to higher inflation."

Powell particularly said, "I understand how painful the price increases of items like groceries and gasoline are." It was confirmed that the rise in fuel and food prices led the inflation increase in the September Consumer Price Index, which rose 5.4% compared to the same period last year.

Powell confirmed that if inflation does not subside and becomes prolonged, "we will use all our tools."

While reaffirming the implementation of asset purchase tapering in November, Powell emphasized that there are no plans to raise the benchmark interest rate.

Powell's remarks weighed on tech stocks sensitive to interest rates. The Nasdaq index closed down 125.50 points (0.82%) at 15,090.20, and the Standard & Poor's (S&P) 500 index also fell 4.88 points (0.11%) to close at 4,544.90.

The Dow Jones Industrial Average, which includes many economically sensitive stocks, rose 73.94 points (0.21%) to 35,677.02, reaching an all-time high, supported by strong corporate earnings.

The 10-year U.S. Treasury yield fell 0.037 percentage points from the previous day to 1.638%.

The December West Texas Intermediate (WTI) crude oil price closed up $1.26 (1.53%) at $83.76. Oil prices have risen for nine consecutive weeks.

This content was produced with the assistance of AI translation services.