Powell Says No Painless Way To Get Inflation Behind Us

Q: Can you explain what about high inflation now threatens the job market?

• A: People see wage increases eaten up by inflation. How do we get rid of inflation? It would be nice if there were a way to just wish it away, but there isn't.

A question on economic pain, followed by Qs on housing...

• A: In the housing market, we have to go through a correction to get back to that place [where supply and demand are better aligned].
• There are also longer-run issues with the housing market. It's difficult to find lots now close enough to cities and things like that, so builders are having a hard time getting zoning in lots, and workers and materials. From a business cycle standpoint, this difficult correction should put the housing market back into better balance.

Q: Is there a lag on shelter prices?

• A: Shelter inflation is going to remain high for some time. We're looking for it to come down, but it's not clear when that will happen. So it may take some time. So I think hope for the best, plan for the worst. On shelter inflation you've got to assume it's going to remain pretty high for a while.