- June 21, 2021
- Posted by: Stratford Team
- Category: Economy
On June 16, the Federal Reserve announced it may raise interest rates twice in 2023 in response to higher-than-expected increases in inflation. In his announcement, Fed Chairman Jerome Powell said the higher inflation recorded this year should be temporary, but the risks that it would be “higher and more persistent than we expect” could not be ignored.
John Horn, professor of practice in economics at Olin Business School at Washington University in St. Louis, agrees with Powell’s overall inflation forecast of 3.4% for 2021. Inflation in some high-demand categories — such as travel, construction material and automobiles — may be even higher, he said.
However, some prices, such as lumber, are already coming back down, providing hope that current inflation is a short-term corrective measure and not a sign of long-term systemic problems.
“The uncertainty for me is how this gets played politically and what messaging gets…