Fed Chair Powell: A lot of high costs are embedded due to higher inflation in 2022 and 2023

Economic Outlook - The yield curve has steepened, with ten-year rates being 50 basis points higher since September 2024, raising questions about the effectiveness of continued rate cuts in the absence of new data [1] - Long-term bond movements are influenced by inflation compensation, which remains at comfortable levels consistent with a 2% inflation target over time [2][3] - The increase in rates is not indicative of long-term inflation concerns but may reflect expectations of higher economic growth [4] Public Concerns and Policy Focus - Despite public concern over high prices and inflation, the focus remains on stabilizing the labor market, which appears relatively stable [5] - The Federal Reserve has a robust network of contacts that indicate high costs are largely due to embedded inflation from previous years rather than current inflation rates [6] - The goal is to restore inflation to the 2% target while also fostering a strong economy with rising real wages and job growth [7][8]