Fed's Kaplan says jury is out about inflation outlook

FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks during an interview in his office at the bank’s headquarters in Dallas, Texas, U.S. January 9, 2020. REUTERS/ Ann Saphir

(Reuters) – Dallas Federal Reserve Bank President Robert Kaplan on Tuesday said he expects inflation to rise in coming months and then “settle down” near 2.25% by year’s end, adding that he’s still trying to understand how much of the rise in inflation will persist into coming years.

“We’re watching it very very carefully,” Kaplan told the Community Bankers’ of Washington Northwest Conference, noting that his business contacts have begun to tell him they feel the supply chain disruptions and other factors pushing up prices may take longer than they thought to get resolved. As for where inflation will go in the next five years, he said, “The jury is out, and I don’t know.”

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