(Reuters) – Minneapolis Federal Reserve Bank President Neel Kashkari said on Sunday he expects higher inflation continuing over the next few months but warned that the U.S. central bank should not overreact to elevated inflation as it is likely to be temporary.
“The math suggests we’re probably going to see somewhat higher readings over the next few months before they likely start to taper off,” Kashkari told CBS News’ “Face the Nation” in an interview on Sunday.
“But my view is we also need to not overreact to some of these temporary factors, even though the pain is real,” Kashkari said in the interview.
Kashkari on Tuesday said he expects more clarity on the economic outlook by the time the Fed ends its bond-buying program in mid-2022, and is keeping an “open mind” on the timing of any rate hikes to follow.
President Joe Biden’s economic advisers defended his policies on Sunday amid rising inflation that they said was a global issue related to the COVID-19 pandemic, not a result of the administration’s programs.
U.S. consumer prices last week posted their biggest annual gain in 31 years, driven by surges in the cost of gasoline and other goods.
Reporting by Kanishka Singh in Bengaluru; Editing by Daniel Wallis