WASHINGTON—High U.S. inflation may get even higher before subsiding in the face of Federal Reserve action and as supply chain strains recede, San Francisco Federal Reserve Bank President Mary Daly said on Tuesday.
“We could have it be worse before it gets better but it is definitely going to get better,” Daly told CNN, adding that even so she doesn’t expect inflation to have fallen to 2 percent by the end of the year. Consumer prices rose 7 percent last year, eating into American paychecks.
The Fed is expected to begin raising interest rates from near-zero levels next month, a move Daly said she supports. When it does, Daly said, the Fed should do neither too little nor be “overly aggressive,” mindful that the Fed alone cannot cure inflation that’s caused in large part by ongoing pandemic disruption.