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The supply-chain woes bedeviling the U.S. economy will be resolved in time to allow continued expansion in 2022, said Chicago Federal Reserve President Charles Evans on Thursday.
“The reason why I think momentum will be good going into next year is because I think the supply-chain issues are going to be rectified,” Evans said, during a discussion as part of the BKD Financial Services Virtual Symposium.
The unemployment rate is likely to continue to fall below 4% and could approach the 3.5% rate seen before the pandemic, Evans said.
The Chicago Fed President, one of the leading monetary policy doves at the central bank, said he thinks inflation could moderate to “closer to 2%” by the end of next year.
The economy remains far away from any risk that higher inflation readings become embedded in the economy, he said.
The Fed has positioned itself quite well, Evans said. The central bank has started to slow down, or “taper” its asset purchases and those should end in June next year. Over the next year, “I think we’ll be in a better position to understand where future inflationary pressures are going to go and how much we should adjust the stance of monetary policy”, he said.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
dipped below 1.6% on Thursday.
