Top Fed official sees US inflation slowing as supply issues resolve

Author: APP

The wave of US price increases that have battered consumers in recent months should slow this year, as supply and transportation issues are resolved, a top Federal Reserve official said on Friday. New York Federal Reserve Bank President John Williams said that he saw inflation falling to 2.5 percent this year, but cautioned that the ongoing Covid-19 pandemic means any forecast faces high uncertainty. Given the rapid recovery, improving labor market and high inflation, he said that the Fed was “approaching a decision” on raising lending rates.

Inflation in 2021 hit its highest rate in nearly 40 years, and the Fed already has begun to remove the massive stimulus pumped into the world’s largest economy during the pandemic to aid in the recovery.

Many economists now expect the Fed’s policy-setting Federal Open Market Committee to raise the benchmark interest rate of zero in March, with three or even four hikes possible this year.

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