Federal Reserve Chairman Colin Powell said Tuesday that the Fed will not pre-emptively raise interest rates and will not raise interest rates because it feels that employment is too high.
Powell testified on "the Fed's response to the coronavirus pandemic" before the House of Representatives Special Subcommittee on Coronavirus crisis on Tuesday afternoon.
Powell said that the best way for the Fed to ease inequality is to focus on employment and will take measures to deal with the substandard unemployment rate. Labor supply and employment are expected to be good this year.
On the issue of inflation, which is of general concern to the market, Powell said that 5% inflation is unacceptable. He said inflation was largely due to the reopening of the economy to a greater extent than previously expected.
Powell reiterated that the Fed is prepared to use its tools if necessary to guide inflation back to 2%. Over time, those factors that affect inflation are expected to subside.