STEVE INSKEEP, HOST:
Federal Reserve Chairman Jerome Powell will remain in charge of the fight against inflation. The Senate just confirmed him for another four-year term. Here's NPR's Scott Horsley.
SCOTT HORSLEY, BYLINE: Powell supporters praised the Fed chairman for his steady hand in steering the central bank through the ups and downs of the pandemic economy. Right now consumer prices are way up and climbing at a rapid pace. Powell says he and his colleagues are determined to bring inflation down.
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JEROME POWELL: We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.
HORSLEY: But the Fed's main tool for fighting inflation is a kind of sledgehammer - higher interest rates. By making it more expensive to borrow money, the Fed can knock down demand and cool off prices. But it often dents the economy in the process. Concern that the Fed's rate hikes might trigger a recession has caused a sharp sell-off in the stock market.
That's where resolve comes in. Powell thinks the economy is strong enough to withstand higher interest rates without falling into recession. But even if it's not, he's prepared to press ahead with higher rates, if that's what it takes to bring inflation under control.
Powell has spoken admiringly of former Fed Chairman Paul Volcker, who famously tolerated punishing back-to-back recessions in the early 1980s in order to break a decadelong cycle of runaway price hikes.
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POWELL: He had the courage to do what he thought was the right thing. That's the test. We see restoring price stability as absolutely essential for the country.
HORSLEY: Powell's lopsided confirmation vote, 80-19, shows the broad bipartisan support he enjoys in the Senate. That popularity may be tested, though, as the Fed's effort to control inflation starts to be felt in higher borrowing costs and a possible economic slowdown.
Scott Horsley, NPR News, Washington.
(SOUNDBITE OF MATT JORGENSEN'S "SPACE, PLANE AND LINE") Transcript provided by NPR, Copyright NPR.
