[Ed. – Not to worry. Biden says that spending $5 trillion on Democratic wish list items will restore equilibrium to the economy.]
Federal Reserve Chairman Jerome Powell warned that the risk of inflation “could turn out to be higher and more persistent than we expected” following a decision to keep the interest rate unchanged.
JEROME POWELL, FEDERAL RESERVE CHAIRMAN: The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic.
As the reopening continues, bottlenecks, hiring difficulties, and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expected.
Our new framework for monetary policy emphasizes the importance of having well-anchored inflation expectations, both to foster price stability and to enhance our ability to promote are broad-based and inclusive maximum employment goal.
Indicators of long-term inflation expectations appear broadly consistent with our longer-run inflation goal of 2%.