October 28, 2021

Fed Minutes September 2021: Officials Worried About Supply Chains

“Participants noted that their district contacts generally did not expect these bottlenecks to be fully resolved until sometime next year or even later.”

Consumer prices jumped more than expected last month, data released on Wednesday showed. The Consumer Price Index climbed 5.4 percent in September from a year earlier, faster than its 5.3 percent increase through August. From August to September, the index rose 0.4 percent, also above expectations.

Housing prices rose, and food — especially meat and eggs — cost consumers more. When volatile food and fuel prices are stripped out, inflation is still rapid, at 4 percent in the year through last month.

Fed officials have repeatedly said they expect price gains to moderate as the economy gets back to normal, but they have stuck an increasingly wary tone as inflation has been slow to moderate.

“I believe, as do most of my colleagues, that the risks to inflation are to the upside, and I continue to be attuned and attentive to underlying inflation trends,” Richard H. Clarida, the Fed’s vice chair, said during a speech Tuesday.

Among the causes for concern: Inflation expectations seem to be picking up, at least by some measures.

The Federal Reserve Bank of New York’s Survey of Consumer Expectations showed this week that medium-term inflation expectations — those for three years ahead — climbed to 4.2 percent in September from 4 percent in August. That is the highest level since the series started in 2013. Short-term expectations jumped to 5.3 percent, also a new high.

Article source: https://www.nytimes.com/2021/10/13/business/economy/fed-meeting-minutes-september-2021.html

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