WASHINGTON (Reuters) – The U.S. is likely at the “back end” of the current inflation surge though it remained unclear how long it may take the rate of price increases to decline to the Fed’s 2% target, Richmond Federal Reserve president Thomas Barkin said on Wednesday.
“My personal hypothesis is that we are on the back end” of the surge that has pushed consumer price increases to a 40-year high, Barkin said. How high the Fed needs to raise interest rates to fix the problem is “highly related to how malleable you think inflation is going to be” to things like improvements in supply chains or other factors, Barkin said, “That is a question we are trying to figure out.”
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)