(Reuters) – U.S. inflation is above the Federal Reserve’s 2% inflation target and policymakers need to watch carefully to ensure that pandemic-induced pressures do not cause long-term inflation expectations to become unanchored, Atlanta Fed Bank President Raphael Bostic said on Tuesday.
“I’ve seen enough to conclude that underlying inflation is indeed above the [Federal Open Market] Committee’s 2 percent objective,” Bostic said in remarks prepared for a virtual event organized by the Peterson Institute of International Economics.
Bostic said he believes that many of the pricing trends caused by the pandemic will “unwind by themselves,” but he cautioned that some of the supply chain disruptions may last longer than initially expected.
“Up to now, indicators do not suggest that long-run inflation expectations are dangerously untethered,” he said. “But the episodic pressures could grind on long enough to unanchor expectations.”
(Reporting by Jonnelle Marte)
