WASHINGTON (Reuters) – The fiscal and monetary stimulus flowing through the economy now may lead prices to jump and make inflation hard to gauge in coming months, but shouldn’t lead to a 1970s bout of runaway prices, Atlanta Federal Reserve president Raphael Bostic said on Tuesday.
“There is a lot of concern that with all this demand and all this money that is available that there is going to be a rush to buy and engage and that is going to drive prices up. That is true for the short run,” Bostic said in comments on an Clark Atlanta University podcast. “But a lot of these stimulus funds are not forever funds…Once they flow through the economy I think we will be in a better position to get a true signal of what inflation is…Right now I am expecting…we won’t see runaway inflation in the near term.”
(Reporting by Howard Schneider)