Fed Governor Lael Brainard said in a speech, “increasing vaccinations, along with enacted and expected fiscal measures and accommodative monetary policy, point to a strong modal outlook for 2021, although considerable uncertainty remains”.
“Inflation is likely to temporarily rise above 2 percent,” she added. “Transitory inflationary pressures are possible if there is a surge of demand that outstrips supply in certain sectors when the economy opens up fully”. But, “a burst of transitory inflation seems more probable than a durable shift above target in the inflation trend and an unmooring of inflation expectations to the upside”
“Today the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress,” she said. “We will need to be patient to achieve the outcomes set out in our guidance”.
