Fed Chair Jerome Powell said in an IMF event, ” there will be upward pressure on prices which may be passed along to consumers in the form of price increases”. But he added, “we think that that will be temporary.” He also noted that inflation has been low for more than two decades, and that fed into a psychology of low inflation expectations.
“If inflation were unexpectedly, counter to our expectations, to move meaningfully above levels where we are comfortable – and in particular inflation expectations… if we see them moving persistently and materially above levels we are comfortable with, then we would react to that,” he said.
