Head of the Federal Reserve System (Fed) Jerome Powell acknowledged that the US prices are growing much faster than predicted, Interfax reports.
Inflation may be higher and sustainable, he said. The reason for the incontine price increase is the result of the opening of the economy, Powell believes. The head of the Fed added that the height of the pending demand found the company by surprise, they cannot satisfy it completely. Many firms are unable to find enough employees or they do not have the right amount of raw materials.
Problems with deliveries were more significant than expected, Powell said. According to him, mainly the price increase by companies is a one-time phenomenon. The consumer price index in May grew by 3.9 percent in annual terms. It became a record for 13 years. The head of the Fed believes that inflation will decrease next year and then returns closer to the target level of two percent.
High inflation in the United States will affect the entire global economy, said Russian President Vladimir Putin earlier. “Already two years in a row, they make a deficit budget 15 percent. This deficit exercises due to what? Due to the issue. Hence inflation,” he noted. According to Putin, in Russia, inflation “may not be so significant, but still comes out for our targets.”