Powell Says Aware This Is A "Very Different" Expansion

Q: Any metrics the Fed uses to assess how inflation impacts different groups of Americans, eg lower-income earners?

• A: People who are on fixed incomes, living paycheck to paycheck, are spending all they are earning on basic necessities, so inflation right away forces people like that to make very difficult decisions.
• Not aware of inflation falling more on some groups, that's not the point, some people suffer more. For the economically well-off, inflation isn't good, but they're going to continue to eat and drive their cars and things like that.

Q: Some investors fear the Fed may be moving too late on inflation - was a hike of more than 25bps discussed today? Re supply chains, Ford says the chip shortage could last into 2023, timeline of when we could see supply chain relief?

• A: I do not expect the supply chain issues to be completely worked out by the end of the year. I expect progress to be made in the 2nd half of this year. By some metrics making progress but overall not making progress, and things like semiconductors, issues will go quite a long time, I would think beyond 2023.
• Re moving too late on inflation: our policy needs to be positioned to address the full range of plausible outcomes... we're positioned to do that and committed to doing that.
• Re the size of increases, we haven't faced those decisions, we haven't made them. But as we work our way through this meeting by meeting, we are aware this is a very different expansion.