Federal Reserve press conference, 2022-09-21 — Chair Jerome Powell

Question (Edward Lawrence, Fox Business): Thank you for taking the question, Mr. Chairman. Edward Lawrence for Fox Business. So you had said that Americans and businesses need to feel some economic pain as we go forward. How long from here should Americans be prepared for that economic pain?
Answer: How long? I mean, it really depends on how long it takes for wages and, more than that, prices to come down for inflation to come down. And so what you see in our projections today is that inflation moves down significantly over the course of next year and then more the next year after that. And I think once you’re on that path, that’s a good thing. And things will start to feel better to people—they’ll feel lower inflation, they’ll feel that the economy is improving. And also, if our projections are close to right, you’ll see that the costs in unemployment are, they’re meaningful, and they’re certainly very meaningful to the people who lose their jobs. And we talk about that in our meetings quite a lot. But, at the same time, we’d be setting the economy up for another long period—this era has been noted for very long expansions. We’ve had three of the four longest in measured history since we got inflation under control. And that’s not an accident. So when inflation is low and stable, you can have these 9, 10, 11—10-year, anyway, expansions, and you can see what we saw in 2018, ’19, and ’20, which was very low unemployment, the biggest wage gains going to people at the low end of the spectrum, the smallest racial gaps that we’ve seen since we started keeping track of that. So we want to get back to that. But, to get there, we’re going to have to get supply and demand back in alignment, and that’s going to take tight monetary policy for a period of time.