According to the Fed’s chaplain, inflation levels could remain high at the end of the year

© Reuters. FILE PHOTO: Robert Kaplan, President of the Dallas Federal Reserve Bank, speaks at the Commonwealth Club in San Francisco, United States on October 11, 2019. REUTERS / Ann Saphir

(Reuters) – The Federal Reserve will monitor inflation closely as the economy works through the supply and demand imbalances caused by the pandemic to ensure that consumer inflation expectations remain anchored near the central bank’s 2% target, said Robert Kaplan, president of the Dallas Fed Bank, Monday.

Inflation readings are likely to fall in the fall but could rise by the end of the year if some of the disruption caused by the pandemic persists, Kaplan said during a virtual town hall meeting organized by the bank.

The Fed official expects the US gross domestic product to grow 6.4% and the unemployment rate to fall to 4% by the end of the year.

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