Powell: Taming inflation will inflict 'pain' on Americans

US Federal Reserve Chair Jerome Powell has warned of "pain" ahead for Americans in the battle against inflation.

Taming US inflation will inflict "pain" on American families and businesses, Powell said on Friday in a speech to global policymakers in Jackson Hole, Wyoming.

But failure to bring prices down from their current 40-year high would be even more harmful, he added while addressing the annual gathering of central bankers.

Powell pledged the Fed will continue to act "forcefully" and keep policy tight, which is likely to slow the economy, adding that failing to do so "would mean far greater pain.”

He warned that the strong US job market will suffer in order to get prices down, calling it the consequences of the "unfortunate costs of reducing inflation."

The Fed has been campaigning to raise interest rates, and Powell stressed that the fight against inflation is not over.

"Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance," he told the gathering.

"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," Powell said.

"But a failure to restore price stability would mean far greater pain," he noted.

US Treasury Secretary Janet Yellen has also said that the United States faces "unacceptable levels of inflation" and an appropriate budgetary stance is needed to help reduce inflationary pressures.

Inflation in the US hit a 40-year high in March and currently is hovering around 8.5 percent. In recent weeks, President Joe Biden has signaled a willingness to tweak tariffs on Chinese imports in order to ease inflation.

Economists estimate the move would not have a significant immediate effect on inflation but has the potential to bring about a full percentage point decrease in about a year.

China has argued that tariff reductions would cut costs for American consumers.

Biden has described combating inflation as his “top domestic priority” and the White House has been searching frantically for remedies.

Biden has taken a range of targeted actions to deal with the soaring gas prices, which has created serious headwinds for his Democratic Party ahead of the midterm election in November.

Recent surveys have found that three out of four middle-class Americans feel that their income cannot keep up with soaring inflation.

Most Americans are preparing for a recession by cutting back on spending, delaying major purchases, or planning to work longer before retirement.

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