Federal Reserve Governor Christopher Waller (Christopher Waller) said in a speech on Tuesday that if Qualcomm IncThe inflation continues until the end of the year, and the Fed may have to adopt a "more aggressive policy response" to control it.
Mr Waller said he remained confident that the US economy had passed the worst of the COVID-19 epidemic and that labour and other supply shortages would ease over time. I still see supply and demand playing a role in moderating price increases, thereby bringing inflation back to the Fed's 2 per cent target.
This could mean that any change in the Fed's key policy rate "will take some time".
But Mr Waller said he thought the risks were shifting and he was now "very concerned" that the current rapid rise in prices could continue.
Us CPI has risen at an annual rate of more than 5 per cent for four months in a row, not seen since 1990.
"the next few months will be crucial to assess whether the high inflation data we are seeing are temporary," Mr Waller said. "if monthly inflation data remain high for the rest of the year, a more positive policy response may be needed in 2022, rather than just scaling back bond purchases."
Mr Waller said the process of scaling back bond purchases should begin after the Fed's upcoming November meeting and is expected to be completed by the middle of next year.