MNI: Bowman Sees Small Risk of Persistently Higher Inflation

Federal Reserve Governor Michelle Bowman on Wednesday said price pressures will ease when supply bottlenecks are resolved and she sees little risk of inflation persistently overshooting the Fed's target.

"Although I expect these upward price pressures to ease after the temporary supply bottlenecks are resolved, the exact timing of that dynamic is uncertain. If the supply bottlenecks prove to be more long-lasting than currently expected, I will adjust my views on the inflation outlook accordingly," she said. Inflation will be above 2% for the next few months, she added.

"At this point, the risk that inflation remains persistently above our long-run target of 2 percent still appears small," she said in remarks prepared for the Colorado Forum.

Bowman is optimistic the economy will keep up its recent stronger pace of growth in the coming months, and said "our policy is in a good place."

"The economy has gained momentum in the past several months and is well positioned to grow strongly in 2021. Nevertheless, we have further to go to recover from the economic damage inflicted by the COVID-19 pandemic, and risks remain," she said.

MNI has reported that Fed officials could become more bullish about the economy's prospects by the time it issues the next round of forecasts in June.