MNI BRIEF: Fed May Weigh Price Gains Against Job Slack- Wright

Federal Reserve policy makers may need to weigh minor inflation overshoots against the 10 million people left out of the job market by the pandemic, Minneapolis Fed Research Director Mark Wright said during an MNI webcast Wednesday.

"We are going to have to balance the two" Wright said, adding that the Fed has the tools if needed to deal with rapid inflation. "We are a long way from where we think full employment should be" he said.

Inflation expectations so far seem in line with the Fed's goals, though it would be more troubling if expectations jumped and started feeding price gains, Wright noted. When asked about tapering QE, Wright referred back to Chair Jerome Powell's comments that it's too soon to even think about such action. He said the current inflation cycle is hard to compare to say the 1970s because the economy has changed so much on the supply side and the Fed's credibility in tackling inflation has risen, Wright said.