Watch: Fed Chair Jerome Powell dismantles Fox Business reporter's inflation claims
C-SPAN/screen grab

Federal Reserve Chairman Jerome Powell pushed back against a Fox Business correspondent who tried to link inflation to government spending.

At a Wednesday afternoon press conference, Fox Business reporter Edward Lawrence suggested President Joe Biden's budget added to inflationary forces.

"Inflation has been rather sticky, so do you need help from the fiscal side to get inflation down faster?" Lawrence wondered.

"We don't give advice to the fiscal authorities, and we assume that we take fiscal policy as it comes to our front door, stick it in our model along with a million other things, and we have responsibility for price stability," Powell replied. "And we will get inflation down to 2% in time."

Lawrence followed up with a leading question.

"But the spending that's happened is working against what you are doing, right?" he asked. "So it's prolonging inflation?"

Powell, however, argued that government spending was not a top driver of inflation.

"You have to look at the impulse from spending, because spending was, of course, tremendously high during the pandemic, and then as the pandemic programs rolled off, spending actually came down," he pointed out. "So the sort of fiscal impulse is actually not what's driving inflation right now."

"It was at the beginning, perhaps, part of what was driving inflation, but that's not really the story now," he remarked.

At the same press conference, Powell signaled the Fed would soon end its regime of rate hikes.

"We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation," he explained. "Instead, we now anticipate some additional policy firming may be appropriate."

Watch the video below from C-SPAN.