Inflation in the United States is becoming broader and expectations of future price increases are rising, a trend that monetary authorities will be watching closely, said New York Federal Reserve (Fed) Chairman John Williams.
While some of the price increases seen today are related to the pandemic and imbalances between supply and demand, there have also been increases in other areas, such as housing, he said.
“We have definitely seen a spike in core inflation in the United States that we will study carefully.”, He indicated during a virtual panel with the chief economist of the European Central Bank (ECB), Philip Lane.
An increase in inflation expectations in the short and long term is a development “positive“Because they have reversed some of their previous falls. But officials would not want long-term inflation expectations to rise significantly higher, he said. Williams.
The United States economy is “roaring“After the disorder caused by the pandemic and a”unique set of circumstances“It is causing changes between supply and demand, he said.
“I think our framework is suitable for this because it again starts from this point where we want to make sure that inflation expectations are well anchored at 2% over time.Williams said.
When asked for the paper about a possible Fed digital currency, Williams said that it is being in “study mode”And trying to better understand the technology that could be used and the monetary policy questions that need to be addressed regarding a central bank digital currency.
“I think it is early to think about all these issues “, Williams asserted. “I also think that they are very connected with what happens in the world of cryptocurrencies, stablecoins and things like that.”.
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