By Ovunc Kutlu
ANKARA (AA) - The rise in crude oil prices causes higher inflation and the coronavirus lockdown in China worsens supply disruptions, the Federal Reserve Chair Jerome Powell said Wednesday.
"Price pressures have spread to a broader range of goods and services. The surge in prices of crude oil and other commodities that result from Russia's invasion of Ukraine is creating additional upward pressure on inflation," Powell said in a press conference after the central bank's historic rate hike.
"COVID related lockdown in China is likely to further exacerbate supply chain disruptions," he added.
The Fed earlier raised its benchmark interest rate by 50 basis points after the conclusion of its two-day meeting.
The central bank's aggressive move, the steepest rate hike since 2000, carried the benchmark rate to a range of 0.75% to 1%, from its previous level of 0.25% to 0.5%, in order to fight against record-high inflation.
"Inflation is much too high and we understand the hardship it is causing. And we are moving expeditiously to bring it back down. We have both the tools we need and the resolve it will take to restore price stability," he told.
"It is essential that we bring inflation down if we are to have sustained period of strong labor market conditions that benefit all," he added.
Powell said American economy expanded at a robust pace of 5.5% last year, but the overall economic activity edged down in the first quarter.
He noted that the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation indicator, jumped 6.6% in March on an annual basis.