MNI BRIEF: Fed's Barkin: See Bottlenecks But Inflation Benign

Federal Reserve Bank of Richmond President Tom Barkin said Friday that supply bottlenecks and fiscal aid will boost prices this year, but inflation over the longer term is expected to remain benign.

"We're already hearing lots of stories of supply chain challenges of manufacturers trying to meet demand in particular in places like construction or grocery and food imports. But I just remind everybody that inflation is not a short-term phenomenon, it's a long-term phenomenon, and expectations remain steady as best as I can tell," he told a regional business forum. "We're watching inflation and if needed the Fed has the tools if it were to escalate."

His comments come as current and former policymakers express worry that the large fiscal response to the pandemic could tie the Fed's hands on inflation.