Don’t panic about rising inflation in 2021. That’s the message delivered Monday by the president of the New York Federal Reserve.
John Williams, one of the top officials at the U.S. central bank, said he expects inflation will “run above” the Fed’s 2% target through the rest of the year.
Yet he also predicts inflation will subside to 2% by 2022 after the U.S. and world economies are mostly reopen and pentup demand has largely been met.
“It’s important not to overreact to this volatility in prices resulting from the unique
circumstances of the pandemic and instead stay focused on the underlying trends in inflation,” Williams said in a virtual speech to the Women in Housing and Finance Annual Symposium.
The cost of many key parts and materials have soared this year owing to a rapid strengthening of the U.S. economy and persistent disruptions in global supply chains tied to the pandemic. Computer chips used in…