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Kaplan sees a risk of inflation settling in the US economy

By Ann Saphir

(Reuters) – Dallas Federal Reserve Chairman Robert Kaplan on Friday raised the possibility of a worrying rise in inflation expectations in the United States as imbalances between supply and demand for labor and goods is pushing prices up.

Most of the monetary policy makers of the United States central bank see the upward pressure – evident in the 4.2% year-on-year increase in consumer prices – as temporary, as they expect supply chains to end. catching up with booming demand, more workers returning to the workforce for vaccinations and the reopening of schools and daycare centers.

The spending momentum that contributes to higher prices will diminish, they say, once the additional savings have been used up and the government checks have been spent. Imbalances will also be reduced, preventing a permanent upward shift in the perception of inflation by companies and households.

But Kaplan – an outspoken central banker whose views sometimes disagree with those of his colleagues – isn’t so sure.

“What is not known is, depending on how long it takes, if that starts to get embedded in inflation expectations, and you are worried that inflation expectations will start to be higher, and then you are raising them to a level that is not consistent with anchoring them at 2%, “said Kaplan at the University of Texas at Austin.

“That is the part that worries me: this is a risk for me,” he added.

And it is all the more reason for Kaplan to ask his colleagues at the Fed to “sooner rather than later” discuss reducing the central bank’s bond purchase program, as the pandemic is more under control and the economy moves towards its goals. full employment and inflation of 2%.

Kaplan said on Friday that contacts in sectors affected by the global semiconductor shortage, for example, have told him that it could now take up to two years to resolve the problem.

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The clogging of chip supply chains caused a record rise in prices for used cars and trucks last month. And it’s not just about the microprocessors, Kaplan said Friday: It’s unclear how long bottlenecks can last in many industries.

“More fiscal policy is coming, demand could strengthen for some of these products, and that is creating some of the uncertainty,” he said.

(Edited in Spanish by Javier López de Lérida)

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