St. Louis Fed President James Bullard said Thursday that there is a tangible risk of inflation that could be even stronger than expected, as reported Reuters.
“Lawmakers will need to take into account the new inflation risks in the coming months,” added Bullard. “A full reopening in the US and around the world could mean more tailwinds for the US economy and faster price increases.”
Bullard further noted that the surprise to the upside could push inflation beyond what the Fed needs to account for weak inflation in the past.
Market reaction
The US dollar index did not show an immediate reaction to these comments and continues to fluctuate around 91.80.
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