Chicago Fed Governor Charles Evans said Tuesday that current inflation will not last long and will eventually fall below the Federal Reserve’s target.
Inflation by several means Run at the height for the first time in 30 yearsEvans told CNBC that supply chain bottlenecks and other issues would subside and price pressures would ease.
“These are high and I’m relieved that they will go down as the supply bottleneck disappears,” he told CNBC’s Steve Liesman during the live.Squawk Box“Interview.” I think it could be longer than we expected. Absolutely, there is no doubt about it. However, I think it is unlikely that these prices will continue to rise. “
Inflation was 3.6% year-on-year, the highest since the early 1990s, according to the Federal Reserve Board’s recommended gauge. Other measures, Consumer price index, etc., Inflation gets even hotter.
Evans acknowledged that this trend is putting pressure on the economy.
“It’s definitely a challenge for households and businesses. That means it cuts income and wages. It’s a problem. We’re definitely watching it,” he said. “This isn’t really a monetary policy issue, it’s an infrastructure supply issue at the moment. So I think inflation will go down. If it goes down, we’ll still have low interest rates … the world.”
Nevertheless, the Fed widely shows that it has Meet the inflationary part of that mission, The level is well above the 2% target. As a result, central banks are expected to slowly begin to withdraw the unprecedented support they provided during the pandemic. Gradual decline in monthly asset purchases..
However, the current Federal Open Market Committee forecasts that interest rate hikes are not expected to continue until at least the end of 2022. According to CME’s FedWatch tool, market prices are expected to undergo their first price increase in November or December next year.
Mr Evans said he was embarking on a taper, but said the Fed would soon face the familiar change of raising inflation to healthy levels and would need to keep interest rates low.
“We are only challenging the acquisition of monetary policy to generate more than 2% sustainable inflation so that we can achieve an average of 2% in the long run,” he said.
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Fed Evans expects inflation to fall below target 2% after current rises subside
Source link Fed Evans expects inflation to fall below target 2% after current rises subside
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