Federal Reserve Chair Jerome Powell sees two possible paths for the economy and monetary policy over the next year: With some luck, inflation will cool with the help of more supply. And if that fails, the Fed won’t hesitate to impose a more painful solution.

Federal Reserve Chair Jerome Powell said officials should weigh removing pandemic support at a faster pace and he retired the word “transitory” to describe stubbornly high inflation, though a new Covid-19 strain remains a risk.

Federal Reserve Chair Jerome Powell said officials can be patient on raising interest rates -- after announcing a start to reducing their bond purchases -- but won’t flinch from action if warranted by inflation.