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WASHINGTON—Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, today questioned Federal Reserve Chairman Jerome Powell about historically high inflation rates. 

Below are key excerpts from the exchange.

Kennedy: “Mr. Chairman, inflation is just an imbalance of supply and demand. Can we agree on that?”

Powell: “Yes, generally.”

Kennedy: “And to put a little finer point on it, our inflation at this time—and this is the case with respect to most cases of inflation—demand is greater than supply, so prices go up?”

Powell: “In some parts of the economy, yes.”

. . .

Kennedy: “What about if we reduce the regulatory burden, let’s say on refineries? Wouldn't that incent refineries to start refining more and help on the supply side?” 

Powell: “I would say anything that could increase capacity on that front could have a positive impact.”

. . .

Kennedy: “Yeah, but would that help? I’m not trying to get you to endorse legislation. Mr. Chairman, we’ve got a hell of a mess here, okay? Inflation is hitting my people so hard they’re coughing up bones. . . . It’s the highest in 40 years, our national debt is greater than our national output, crime is up, the border is open, respect for institutions is way down and 70 percent of the American people think we’re headed in the wrong direction." 

. . .

“President Biden—I don’t blame him, I understand politics—he keeps saying, ‘Well, your 401K has crashed, and gas has gone from two bucks to five bucks a gallon because the economy is so good.’ And the American people know that’s not true. Now, other than relieving regulatory burden . . . what if the United States Congress said, ‘Look, we've got a budget. We’re going to freeze spending. We’re going to stop injecting more money into the economy. We’re going to freeze spending until Powell can get control on the demand side.’ Would that help?”

Powell: “You know, I feel like I’m giving you advice on what to do when we’re not getting our own job done. I feel like maybe a better thing to do would be for us to get our own house in order and do the job you've assigned us.”

Video of the full exchange is here.