(Reuters) – Minneapolis Federal Reserve President Neel Kashkari said many U.S. economic sectors faced rapidly rising prices and were struggling to adjust to reopening after the shutdown.
“Basically, what’s happening is the U.S. economy went through a very abrupt shutdown a year ago,” Kashkari told NPR in an interview published on Saturday https://n.pr/36Hn8fk.
“And now it’s going through a reopening, and you’re seeing many sectors of the economy struggle to make that adjustment.”
Kashkari said he agreed with Federal Reserve Chair Jerome Powell that the economy will return to a more normal pricing environment once it adjusts to the reopening.
“I’m not seeing any evidence yet that we’re going to have sustained high inflation beyond this reopening period, whether that’s six months or a year or 18 months. I’m not sure,” Kashkari said.
Kashkari said in late June he expected recent high inflation readings to be temporary and for Americans to return to the labor market in large numbers in the fall.
Earlier this week, Powell pledged “powerful support” to complete the U.S. economic recovery from the COVID-19 pandemic, but faced sharp questions in a hearing from Republican lawmakers concerned about recent spikes in inflation.
(Reporting by Kanishka Singh in Bengaluru; Editing by Richard Chang)