- Rising pricing pressures over the course of the year wouldn't surprise Dallas Fed President Robert Kaplan, he said in an interview with Yahoo Finance.
- Some inflation will come from shortages in such things as semiconductors, wood products, packaging products, and metals, which "will be resolved over time."
- Crude oil prices could also add to inflationary pressure as he expects global oil prices will "firm further."
- "The jury's out on how much of this inflation pressure is going to be persistent," Kaplan said. Structural forces, such as technology and globalization, help to offset rising prices.
- Asked whether President Biden's $1.9T stimulus plan risks overheating the economy and leading to higher-than-wanted inflation, he said structural headwinds of technology-enabled disruption is a counter-balancing force against inflation.
- Note: Personal consumer expenditures, a measure that the Fed watches closely to gauge inflation has stayed consistently under 2%, except for the short spike that occurred after the sharp drop in March-April 2020.
- Predicting the path of inflation is "not going to be as clear as it might have been 10 years ago or 20 years ago, where you'd be confident that you'd have strong growth, tighter labor force, wage pressure," he said.
- "I think the jury's out on how the cyclical versus structural forces play out," Kaplan said.
- On Wednesday, the Bureau of Labor Statistics said January's core Consumer Price Index increased 1.4% Y/Y, still below the Fed's 2.0% target. On the same day, the Atlanta Fed said businesses see year-ahead inflation at 2.2% in February, unchanged from the January measure.