The president of the branch of St. Louis Federal Reserve’s James Bullard said Thursday that he expects high inflation to prove more persistent than many expect and that interest rates at their current levels may not be high enough to begin to reverse the upward trend in prices.
In an interview with US network CNBC in Jackson, Wyoming, Bullard reiterated that he expects the Fed’s key interest rate to climb from the current range of 2.25% to 2.50% to a range between 3.75% and 4.00 % by the end of 2022, adding that such a forward-looking stance is right for him as it would show “how serious we are about the fight against inflation”.
“A key scenario would likely be that inflation turns out to be more persistent than many on Wall Street expect, meaning that it will be higher than expected and for longer – and that’s a risk that is undervalued by markets today,” Bullard pointed out.
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