(Reuters) – Federal Reserve Bank of Dallas President Robert Kaplan on Friday raised the potential for a worrisome rise in U.S. inflation stemming from imbalances in the supply and demand for labor and for some goods that are putting upward pressure on prices that most Fed policymakers see as transitory.
“What you don’t know is, depending on how long that goes on, whether that starts to get embedded in inflation expectations, and you worry that inflation expectations start to get to be more elevated, and then you are getting them elevated to a level that is not consistent with anchoring them at 2%,” Kaplan told the University of Texas at Austin McCombs School of Business. “That’s the part I’m concerned about – this is a risk for me.”
(Reporting by Ann Saphir; editing by Diane Craft)
