Fed Governor Bowman: It's likely to see inflation last longer than expected

Fed Governor Michelle Bowman said Tuesday that supply chain disruptions are causing prices to rise, and it's important to watch how long inflation lasts and how it affects long-term expectations.

"I have to think about this in the context of the impact on long-term inflation expectations," Bowman said in an online conversation with Richmond Fed President Thomas Barkin. "We are considering a situation where we may see inflation persisting longer than expected a few months ago."

On employment, Bowman said the question now is whether the labor force participation rate will pick up and ease wage pressures. Early retirement during the pandemic could limit economic development, and the lack of childcare services could continue to hinder women's participation in the labor market, which could also weigh on the U.S. economy. The current employment situation in the United States will not soon return to pre-pandemic levels.

This article originated from the Financial Circle Network