© Reuters. FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido
(Reuters) – Chicago Federal Reserve Bank President Charles Evans on Tuesday said he continues to believe supply bottlenecks are driving most of the recent increase in inflation, and though it is higher and may last longer than initially thought, it will subside.
Inflation expected to be 3.5% or 4% this year “cuts into income, wages and so that’s a problem and we are definitely monitoring that, but it’s not really a monetary policy issue, it’s a infrastructure, supply issue at the moment,” Evans said in an interview with CNBC. He also repeated his view, in line with most other Fed policymakers, that the U.S. central bank is close to the time it will begin reducing its monthly asset purchases, and would not be surprised if the taper is complete by mid-2022 or the fall.