Jerome Powell's pitch for a second term: America can't afford runaway inflation

New York(CNN) Federal Reserve Chairman Jerome Powell is pledging not to allow inflation to become ingrained in the American economy, according to prepared remarks released on Monday.

"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," Powell said in the remarks released ahead of his confirmation hearing on Tuesday.

Powell, who President Joe Biden has nominated to another four-year term to run the Fed, said the US central bank is "strongly committed" to achieving its goals of maximum employment and price stability.

"We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched," said Powell.

Prices have been anything but stable recently. Consumer prices rose by 6.8% in November from the year before, the fastest pace in 39 years. The December inflation report, due out on Wednesday, is expected to show price gains accelerated further last month.

Powell argued the Fed, Congress and the American people successfully avoided a "full-scale depression" when Covid erupted in March 2020.

"Today the economy is expanding at its fastest pace in many years, and the labor market is strong," he said.

The unemployment rate tumbled in December to 3.9%, the lowest level since February 2020.

Yet Powell acknowledged that "challenges" remain, including the high cost of living.

"The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation," Powell said.

Powell's confirmation hearing is scheduled for 10 am ET on Tuesday before the Senate Banking Committee.

Senator Elizabeth Warren aggressively lobbied against reappointing Powell, arguing he has gone too soft on Wall Street and that makes him a "dangerous man" for the role.

Powell said in his prepared remarks that during his first term at the Fed, the central bank has continued to ensure a "strong and resilient" financial system.

"We increased capital and liquidity requirements for the largest banks—and currently, capital and liquidity levels at our largest, most systemically important banks are at multidecade highs," he said.