'This inflation is spreading out,' warns Fed Bank President
Inflation is going to spread nationwide, the president of the Federal Reserve Bank of Minneapolis warned Sunday. The wages of many Americans are increasing, he said. Price pressures will result in workers suffering "real wage cuts" due to rising costs of goods and services.
“It’s very concerning. We keep getting inflation readings, new data that comes in as recently as this past week, and we keep getting surprised. It’s higher than we expect,” Fed branch President Neel Kashkari said on CBS News’ “Face The Nation.” “And it’s not just a few categories. It’s spreading out more broadly across the economy and that’s why the Federal Reserve is acting with such urgency to get it under control and bring it back down.”
A report released earlier this month by the Bureau of Labor Statistics showed a key inflation indicator rose 9.1 percent over the previous year, the highest figure since the early 1980s. In June, the Producer Price Index also recorded its highest increase in decades, increasing by 11.3 percent.
“High prices and wages are now trying to catch up to those high prices … and so we need to get the economy back into balance before this really does become from a very wage-driven inflation story,” the Fed president added.
1st August 2022