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Fed officials say high inflation weighing on consumers and needs to be controlled -Breaking


© Reuters. FILE PHOTO – President Thomas Barkin of the Federal Reserve Bank of Richmond poses for a photo during a lunch break at a Dallas Fed Conference on Technology in Dallas (Texas), U.S.A, May 23, 2019. REUTERS/Ann Saphir

By Jonnelle Marte

(Reuters) – Federal Reserve officials stated Tuesday that they were aware of how higher inflation could affect U.S. households. They also noted the impact on consumer sentiment.

Wages are increasing for some workers but consumer sentiment is at a low point that might be associated with recession, said Thomas Barkin of Richmond Fed. He cited the University of Michigan’s consumer sentiment survey.

Barkin stated that she believes that the price impact on individuals is very important. This included those who pay a large portion of their wages on gas and food.

Raphael Bostic, Atlanta Fed president, stated that the central bank wants low inflation as it does not want families to worry about increasing prices. Bostic explained that this is one of the main reasons for the increased levels of inflation seen in recent months and that it needs to be controlled.

In an attempt to decrease the level of monthly asset purchases by the Fed, this was the first step to reducing support for the U.S. in the aftermath of the pandemic. Officials at the Fed would prefer to end bond purchases before raising interest rates.

Some Fed policymakers believe the Fed needs to be ready to respond if inflation continues beyond what was expected. James Bullard of the St. Louis Fed, who spoke earlier in the day said that the Fed should take a “more hawkish” approach to its next two meetings in order to be ready in case inflation doesn’t ease.

“If inflation does go away, we’re in excellent shape to handle it.” Bullard stated on Bloomberg Television that if inflation does not go away quickly, it will be up to (Federal Open Market Committee). To keep inflation under control.” Bullard added.

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