- Says supply disruptions could last longer than expected, boosting chance of CPI remaining above control range
- Higher prices could feed into inflation expectations and contribute to wage pressures, leading to second round effects
- There is much to be hopeful for as we approach full recovery
- While there are some signs supply constraints are easing, most remain largely unresolved; it is hard to pinpoint when pressures will peak
- There is a risk omicron could hold back services consumption and exacerbate upwards pressure on goods
- Degree of excess supply and demand varies across sectors, which means our typical measures of slack are especially uncertain
- Only recently have we seen a meaningful increase in services consumption but it is still 4% below pre-pandemic
This is about exactly what I expected, it's right out of the latest edition of the 'central bankers hymnbook'. This speech could have been delivered by any member of the FOMC and it wouldn't have raised an eyebrow.
