Inflation is running “hotter” than Federal Reserve had anticipated.
The president of the St. Louis Federal Reserve Bank predicted an interest rate hike in late 2022, which is sooner than the central bank consensus. James Bullard, who has led the St. Louis Fed since 2008, said, “The inflationary impulse, I think, is more intense than we were expecting.” He also predicted that despite the rising inflation the rate will eventually drop back down to the central bank’s 2% target.
He added, “We’re expecting a good year, a good reporting. But this is a bigger year than we were expecting, more inflation than we were expecting. I think it’s natural that we’re tilted a little bit more hawkish here to contain inflationary pressures.”
The Federal Reserve has kept interest rates at near zero since the start of the pandemic, although some economists question that tactic given the increasing consumer costs and fears that inflation could be more than transitory.
As the Lord Leads, Pray with Us…
- For federal officials as they evaluate the rises in consumer prices and other inflation markers.
- For government agencies working to improve supply chains that have slowed manufacturing in some areas.
- For members of the Federal Reserve as they watch over America’s monetary policies.
Sources: Washington Examiner, CNBC, Wall Street Journal
