Jerome Powell admitted Tuesday that inflation represents a 'severe threat' to the economy and the Federal Reserve has plans in the works to raise interest rates more than expected if price rises don't level off. Powell, a Republican who has been nominated by President Biden for another term chairing the Fed, made the admission at a hearing for the confirmation of his second term before the Senate Banking Committee. 'If we have to raise interest rates more over time, we will,' Powell said. The Fed envisions three rates hikes this year, though some economists forecast that four will be needed. The Fed under Powell has had a higher tolerance for inflation as it pursued a goal of maximum employment over the last year. The Fed chair was put on defense by Democrats who suggested that raising rates could slow hiring and disproportionately leave lower-income and Black Americans without work. Fed increases lead to higher rates on business and consumer loans, which can slow growth. Powell said he is now more concerned that rampant inflation will have devastating effects on the job market. Powell, a Republican , has been nominated by President Biden for another term chairing the Fed, 'High inflation is a severe threat to the achievement of maximum employment,' he said. Powell also said that the economy no longer needs emergency stimulus, but said it would take time for the Fed to get back to pre-pandemic interest rates. The Fed cut short-term interest rates to near zero and started buying bonds to lower long-term rates in 2020. 'It is really time for us to move away from those emergency pandemic settings to a more normal level,' Powell said. 'It's a long road to normal from where we are.' Powell promised that the Central Bank under his watch will use its tools 'to prevent higher inflation from becoming entrenched.' 'We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation,' he told the committee. Powell also made a nod to supply chain issues, which have played a hand in rising prices everywhere from groceries to new cars. Powell said he was hoping for a 'a return to normal supply conditions' this year. 'What we have now is a mismatch between demand and supply. We have very strong demand in areas where supply is constrained,' he said. Over the past year the unemployment rate has fallen back down to below four percent, but Republicans worried that Powell has moved too slowly to combat price gains under Powell's new employment-focused approach. 'I worry that the Fed's new monetary policy framework has caused it to be behind the curve,' Sen. Pat Toomey, R-Pa., said. Still, he spoke highly of Powell and is supportive of his renomination. Powell, along with the Biden administration has insisted for months that rising inflation was 'transitory' and would settle itself back down. The Fed, along with many private forecasters, got that wrong as they failed to predict how persistent the supply issues would be, Powell said. 'We're not really seeing, yet, the kind of progress essentially all forecasters really thought we'd be seeing by now,' Powell noted, referring to logjams in supply chains. 'People want to buy cars — carmakers can't make any more cars, because there are no semiconductors,' Powell said, underscoring the unprecedented issues the pandemic has brought on. 'That's never happened.' The Fed chair said the supply chain is not yet on a path to healing. 'You always see a few snowflakes, but it doesn't amount to a storm yet.' Prices have risen faster over the past 12 months than they have in 39 years. Core consumer prices, which exclude food and energy and are the Fed's preferred measurement, were up 4.7% in November over last year, well above the Fed's 2% target. The Consumer Price Index at the same time rose 6.8%. Personal incomes rose 0.4% in November, trailing price increases and slightly lower than a 0.5% increase in October. That followed a 1% plunge in September, when federal unemployment benefit expansion came to an end. Powell spent much of his career in investment banking and private equity. He was first nominated for a board seat at the Fed ten years ago by President Obama. President Trump nominated him for chair four years ago. All rights reserved for this news site (dailymail) and under his responsibility