Fed chair Jerome Powell says Americans should expect ‘pain’ in fight against inflation

Federal Reserve Chairman Jerome Powell said on Friday that American households and businesses can expect to experience “pain” as the central bank aims to bring down soaring rates of inflation.

“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance,” Powell told policymakers on Friday.

“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 added: “These are the unfortunate costs of reducing inflation.”

Powell told central bankers that the Fed will likely impose more interest rate hikes in the months ahead in hopes of getting inflation under control.

He warned that “a failure to restore price stability would mean far greater pain.”

Investors will likely be disappointed by Powell’s speech since they were hoping that he may signal more moderation in monetary policy.

The Fed chair made clear that he expects rates to remain at levels that should slow the economy “for some time.”

The stock market registered losses in reaction to Powell’s speech.

The Dow Jones Industrial Average fell by more than 300 points — or 0.9% — while the Nasdaq dropped by nearly 1.3% on Friday.

The S&P 500 was down 1.17%.

“In essence, Powell is clearly stating that right now, fighting inflation is more important than supporting growth,” Jeffrey Roach, the chief economist for LPL Financial, told The Post.

Roach predicted that since “supply chains are consistently improving,” that should “continue to bring inflation rates down.”

He thinks the Fed will hike interest rates by 50 basis points in September and then continue to raise them by increments of 25 basis points in subsequent meetings.