Richmond Fed President Thomas Barkin said in a speech, “we are committed to returning inflation to our 2 percent target and have made clear we will do what it takes.” He expected Fed’s tools to “work over time” and “inflation to come down but not immediately, not suddenly and not predictably”.
“There is a path to getting inflation under control,” he said. “But a recession could happen in the process.”
“We are out of balance today because stimulus-supported excess demand overwhelmed supply constrained by the pandemic and global commodity shocks. Returning to normal means products on shelves, restaurants fully staffed and cars at auto dealers. ”
“Most importantly, moderating demand has a higher purpose squarely in our mandate: containing inflation. If there is any lesson that’s been relearned in the last year, it is that inflation is painful, and everyone hates it.”
