Powell says may take more than three years to hit Fed's inflation goal

FILE PHOTO: Federal Reserve Chair Jerome Powell speaks during a Senate Banking Committee hearing on Capitol Hill, Washington, U.S., December 1, 2020. Al Drago/Pool via REUTERS MANDATORY CREDIT

WASHINGTON (Reuters) – It may take more than three years to reach the Federal Reserve’s inflation goals, Fed Chair Jerome Powell told lawmakers on Wednesday, a further signal the U.S. central bank plans to look beyond any post-pandemic spike in prices and leave interest rates unchanged for a long time to come.

“We are just being honest about the challenge,” Powell told the House of Representatives Financial Services Committee when asked about Fed projections that inflation will remain at or below the central bank’s 2% target through 2023.

The Fed has said it will not raise interest rates until inflation has exceeded 2% and “we believe we can do it, we believe we will do it. It may take more than three years.”

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