Federal Reserve Chair Jerome Powell acknowledged something at the end of his press conference Wednesday that those working in the trenches of global trade during the pandemic have experienced for almost a year.
“It turns out it’s a heck of a lot easier to create demand than it is to, you know, to bring supply back up to snuff,” he said in response to questions from Bloomberg’s Michael McKee.
A sustained surge in American consumer demand for goods, coupled with logistics bottlenecks that have thrown global supply chains out of sync, have now created enough price pressure for the U.S. central bank to raise its inflation projections. More and more observers are questioning just how transitory the higher costs are.
The Federal Open Market Committee marked up all its inflation forecasts through the end of 2023, with officials seeing personal consumption expenditures — their preferred measure of price pressures — rising 3.4% in 2021 compared with a March projection of 2.4%. It increased the 2022 forecast to 2.1%, and 2.2% for the following year.
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