Federal Reserve Vice Chair Richard Clarida said Tuesday that he is not expecting a scenario where an overheating economy leads to runaway inflation.
“The outlook for the economy in terms of economic activity is very, very positive,” Clarida told Yahoo Finance in an exclusive interview.
With the economy re-opening, inflation readings have already jumped. Earlier this month, the Consumer Price Index (CPI) showed consumer prices increasing at the fastest rates in over 10 years.
Some critics have bashed the Fed for keeping its policy this easy for this long, worrying that prices could continue to rise in a possible repeat of 1970s-era hyperinflation. Clarida admitted the CPI print was “a very unpleasant surprise.”
But Clarida said those inflationary pressures “will prove to be largely transitory,” echoing commentary from other Fed officials that have pointed to supply chain bottlenecks as examples of temporary dynamics at play.
