Press conference exchange between KAYLA TAUSCHE and Fed Chair Jerome Powell:

user: Thank you so much. Kayla Tausche from CNBC. Earlier last month, the United Nations warned that there could be a global recession if central banks didn’t change course. The new U.K. prime minister warned of a profound economic crisis there. And I’m wondering how the Fed is weighing international developments in light of a very strong economy here in the U.S. that would seem to be bucking those trends.

assistant: So, of course, we, we keep close tabs on economic developments and also geopolitical developments that are relevant to the economy abroad. We’re in very frequent contact with our foreign counterparts both through the IMF meetings and the regular meetings with central banks that we have, and I have one this weekend with many, many central bankers. So we’re in touch with all of that. So I guess what—it’s clearly a time, a difficult time in the global economy. We’re seeing very high inflation in Europe, significantly because of high energy prices related to the war in Ukraine. And we’re seeing China’s having issues with the zero-COVID policy and much slower growth than we’re used to seeing. So we’re seeing—we see those difficulties. The strong dollar is a challenge for some countries. But we haven’t—we take all of that into account in our models. We think about the spillovers and that thing. Here in the United States, we have a strong economy, and we have an economy where inflation is running at 5 percent. Core PCE inflation—which is a really good indicator of what’s going on for us, the way we see it—is running at 5.1 percent on a 12-month basis and similar to that on a 3-, 6-, and 9-month basis. So we know that we need to use our tools to get inflation under control. The world’s not going to be better off if we fail to do that. That’s a task we need to do. Price stability in the United States is a good thing for the global economy over a long period of time. Price stability is the thing that pays dividends for our economy—for decades, hopefully—even though it may be difficult to get it back. Getting it back is something that gives—that provides value to the people we serve for the long run.

user: If I could just follow on that—thank you. The Fed has acknowledged in the past that the tools that you have don’t affect things like energy and food prices that stem from some of those conflicts overseas, and they’re some of the biggest pain points for consumers. So as you pursue the current path that you’ve outlined, is there a risk that some of those prices simply don’t come down?

assistant: So we don’t directly affect, for the most part, food and energy prices, but the demand channel does affect them just at the margin. The thing about the United States is that we also have strong—in many other jurisdictions, the principal problem really is energy. In the United States, we also have a demand issue. We’ve got an imbalance between demand and supply, which you see in many parts of the economy. So our tools are well suited to work on that problem, and that’s what we’re doing. You’re right, though. We don’t—the price of oil is set globally, and it’s not something we can affect. I think by the actions that we take, though, we help keep longer-term inflation expectations anchored and keep the public believing in 2 percent inflation by the things that we do, even in times when energy is part of the story of why inflation is high.