Fed’s Mester Says US Inflation Mostly Driven by Pandemic-Related Factors

Cleveland Fed President Loretta Mester takes part in a panel convened to speak about the health of the U.S. economy in New York, on Nov. 18, 2015. Lucas Jackson/Reuters

NEW YORK—Both supply-side and demand-side factors are contributing to U.S. inflation right now, but most of the current price changes may be driven by pandemic-related shifts that could subside over time, Cleveland Federal Reserve Bank President Loretta Mester said on Thursday.

Policymakers need to distinguish short-term inflationary pressures from inflation that could be longer lasting when determining how to respond, Mester said during a panel organized by the European Central Bank