Photo taken on Jan. 25, 2022 shows the US Federal Reserve in Washington, D.C., the United States. Photo:Xinhua

US Federal Reserve Governor Lael Brainard said Tuesday that it is "of paramount importance" to get inflation down, noting that the central bank is "prepared to take stronger action" if inflation indicators show such action is warranted.

"Currently, inflation is much too high and is subject to upside risks," Brainard, US President Joe Biden's nominee to serve as the central bank's vice chair, said in prepared remarks at a virtual event held by the Federal Reserve Bank of Minneapolis.

"All Americans are confronting higher prices, but the burden is particularly great for households with more limited resources," Brainard said, noting that lower-income households "disproportionately" feel the burden of high inflation.

Lower-income families expend a greater share of their income on necessities, have smaller financial cushions, and may have less ability to switch to lower-priced alternatives, she said.

US personal consumption expenditures (PCE) surged 6.4 percent in February over the past year, the Commerce Department reported. The index is well above the Federal Reserve's 2 percent target on inflation.

The core PCE, which excludes the volatile food and energy prices, was up 5.4 percent in February from the same period in 2021, marking the biggest jump in nearly four decades.

Despite downside risks posed by geopolitical events including the Russia-Ukraine conflict, the US economy entered this period of uncertainty "with considerable momentum in demand and a strong labor market," Brainard noted.

As of the March labor report, payroll employment has increased at a pace of 600,000 jobs per month over the past six months, and the unemployment rate has fallen by a percentage point, she noted. Latest data from the Labor Department showed that the unemployment rate in March dropped by 0.2 percentage point to 3.6 percent, just slightly above the pre-pandemic level of 3.5 percent.

Wall Street stocks finished sharply lower Tuesday following hawkish comments from a top Federal Reserve official that boosted expectations for more interest rate hikes.

Brainard's comments came as markets were already girding for tougher sanctions on Russia.

US service sector growth accelerated in March as worker shortages and COVID-19 cases eased, but firms continued to face supply challenges, according to an Institute for Supply Management survey released early in the day's session.

Among individual companies, Twitter advanced 2 percent after announcing that Elon Musk would join its board. The Tesla CEO disclosed Monday that he became the company's largest shareholder.

Agencies