United States Federal Reserve Chairman Jerome Powell told Congress on Wednesday that the central bank will not start raising interest rates until it believes its goals on maximum employment and inflation have been reached.

Powell also warned that many who had worked in industries hardest hit by the pandemic and ensuing recession will likely need to find different jobs.

As he did before the Senate Banking Committee on Tuesday, Powell told the House Financial Services Committee that the Fed is in no hurry to raise its benchmark short-term interest rates or to begin trimming its US$120 billion in monthly bond payments used to put downward pressure on longer-term rates.

Financial markets, which had begun to wane Tuesday on fears that higher inflation might trigger an earlier-than-expected tightening of credit conditions by the Fed, rebounded on Powell’s comments.

That trend extended into Wednesday with the S&P 500 index rising more than one per cent.

Powell said the Fed does not see any indication that inflation could race out of control. While price increases might accelerate in the coming months, Powell said those increases are expected to be temporary and not a sign of long-run inflation threats.

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