MNI BRIEF: Fed: Current Inflation Less Widespread Vs 1970s

U.S. inflation pressures broadened last year but not by nearly as much as in the 1970s, the Federal Reserve said in its semiannual report to Congress on Friday ahead of Chair Jay Powell's testimony next week, adding that the highest inflation was concentrated in goods and is expected to ease as supply bottlenecks unwind.

"Although currently more widespread than in recent history, large price increases were considerably less widespread than was seen during the high-inflation regime of the 1970s," the report said.

"In the period ahead, the large price changes in goods may ease once supply chain disruptions finally resolve, but, if labor shortages continue and wages rise faster than productivity in a broad-based way, inflation pressures may persist and continue to broaden out."

The report reiterated the FOMC's view that "it will soon be appropriate to raise the target range for the federal funds rate." Investors widely anticipate a rate hike next month, the only question is whether it will be 25 bps or 50 bps, as some policymakers have hinted is possible.