Fed Chair Warns Fight Against Inflation Will Bring 'Pain To Households'

Federal Reserve Chairman Jerome Powell suggested that the fight against inflation will cause economic pain. During his keynote speech at the Jackson Hole Economic Symposium in Wyoming, Powell vowed that the Fed would "forcefully" fight inflation to bring it down closer to the goal of 2%.

Powell said that reaching that goal "requires using our tools forcefully to bring demand and supply into better balance." However, he warned that those efforts could slow economic growth and result in a softer labor market.

"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," he said. "These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."

Stocks fell following his speech, with the Dow Jones Industrial Average down by over 500 points. The Nasdaq was over 300 points in the red, while the S&P 500 was down over 80 points in mid-day trading.