Federal Reserve chairman doesn't have any idea what will happen with the economy

Federal Reserve Chairman Jerome Powell on Wednesday confessed that he is uncertain what the future holds with the American economy.

According to Politico, the Fed is "tapering its asset purchases" with no clear understanding of the next steps. In a press conference after Wednesday's meeting, Powell focused on the "unknowns" for when "price pressures will ease" and how quickly Americans can reestablish the job market after the Delta variant wreak havoc across the country. He also made it clear that they have no clue whether the Fed will adjust interest rates, saying, "We think we can be patient." That said, traders have already assumed it is forthcoming.

"The long-awaited move signals both optimism about the pace of job growth and wariness about price surges that have pushed inflation up to its highest level in decades," said the report. "The central bank has been buying $120 billion a month in U.S. government debt and mortgage-backed securities, a process designed to supercharge its efforts to keep borrowing costs low for households and businesses."

Powell went on to stress "humility" in the future of the American economy as the worst part of the pandemic transitions to a more vaccinated populace.

He went on to call the labor market tight but noted he isn't clear on whether that's long-lasting. An increase in the labor force could happen, but he said that anyone who assumed killing unemployment would bring the economy roaring back to life may not be correct. The October jobs report, set to be released on Friday, will better indicate both progress and the next steps.

"The level of inflation we have right now is not at all consistent with price stability," Powell said. However, the price problems are also being driven by the supply chain issues from countries still unable to get the pandemic under control, the labor shortage, and the large number of cargo ships waiting to be unloaded off the coasts. He thinks that will all disappear by next year.

"What it really boils down to is something that's common sense, and that is risk management," he said. "We have to be aware of the risks, particularly now the risk of significantly higher inflation. … We have to be in a position to address that risk should it create a threat of more persistent longer-term inflation, and that's what we think our policy is doing now. It's putting us in a position to be able to address the range of plausible outcomes."

Powell is also under investigation for dumping a large amount of stock before the economic crash that happened at the beginning of the COVID crisis.

Read the full report at Politico.