Current rates of price level growth moving around five per cent are staying at their levels for perhaps longer than initially appeared. US central bank management member Michelle Bowman thinks so.
“I also have to think of what prolonged inflation will do to our inflation expectations in this context,” Bowman said during an online interview with Thomas Barkin, head of Richmond branch of the US Fed. According to Bowman, we observe developments from which it can be inferred that high inflation will last longer than “we expected even a few months ago.”
Michelle Bowman also sees the return of the US labour market to pre-Coverage fitness as problematic. It is the level of unemployment that is now the main indicator that the Fed follows in deciding to set monetary policy. “The loss of labor will be the limit on the manufacturing capacity of our economy,” she added.
Bowman mentioned mainly factors like the more difficult return of women to the labor market or the increase in the number of people retiring. Senior employees in particular will be difficult to replace because of their precious work experience, Michelle Bowman also thinks.