MNI: Fed's Barkin: Firms Not Changing Long Term Inflation View

Pent-up demand, supply bottlenecks and base effects are pushing inflation to record highs but firms have not changed their longer run expectations on prices, Federal Reserve Bank of Richmond President Tom Barkin said Thursday after a record-shattering CPI report a day earlier.

"When we talk about inflation, we're talking about a multi-year recurring phenomenon. And as I talked to businesses -- even those that are taking prices up this year -- I still don't hear their medium- to long-term expectations on pricing changing. Nor do you see it in market measures of inflation expectations. They're not yet escalating above our target," Barkin told a regional chamber of commerce.

He cited long-term "disinflationary forces" like the pricing power of big box retailers, Internet-enabled price transparency and global access to lower cost product and talent as potentially "still keeping inflation expectations moderated" and said he would watch the trend "closely."

An Atlanta Fed measure of firms' price expectations rose to a record high this month and could feed into longer term expectations, MNI reported Wednesday.