Fed’s Williams Expects 2% Inflation Next Year

President of the Federal Reserve Bank of New York, John Williams, said that the Fed has set a slow start to easing its asset purchases.

Speaking on Monday to a bankers event, Williams said he believes the U.S. economy is yet to achieve the substantial further progress needed to begin tapering, despite making some progress, adding that the surge in inflation in transitory.

The New York Fed President expects inflation will reach 2% in 2022 and 2023.

“My view is that the spike in inflation mostly reflects the temporary effects of the surprisingly rapid opening of the economy.”

“Once these prices have fully adjusted to the reopening economy, they shouldn’t continue to increase at recent elevated rates, and their effect on overall inflation should subside.”