New York Fed President John Williams said in a a speech that as the economy further reopens, “I expect inflation to run somewhat above our 2 percent longer-run goal for the remainder of this year.” But he emphasized “not to overreact to this volatility in prices resulting from the unique circumstances of the pandemic”, but focus on the “underlying trends”.
“My expectation is that once the price reversals and short-run imbalances from the economy reopening have played out, inflation will come back down to about 2 percent next year,” he added.
Williams also said the economy is now “positioned to grow quickly”. “I expect that the rate of economic growth this year will be the fastest that we’ve experienced since the early 1980s. And that’s not only a forecast—we are already seeing signs of this pivot to strong growth in the economic statistics,” he added.