By Ann Saphir

(Reuters) – With inflation rising and staying higher than anticipated, the Federal Reserve must “a bit more” take off its monetary pedal to correct imbalances between demand and supply, Neel Kashkari, Minneapolis Fed president, said Friday.

Kashkari said that the Fed will tighten monetary policies by raising interest rates to balance it. This is his first statement since earlier this week’s Fed meeting. It indicated that rates will rise in March.

“That would not tap the brakes, but it could let our foot off of the accelerator just a bit,” he stated, adding that “we just do not know” how many rate rises will occur.

The pandemic’s price rise was largely to blame, he said. This has caused supply chain problems and prevented workers from entering the workforce.

Kashkari explained that “a lot of the reasons why prices are high right currently are temporary factors connected to the COVID.” We hope that once the supply chain is in order, some price pressures will be relieved naturally. That means that the Federal Reserve may have to reduce its efforts.

Kashkari answered the question about how many rate rises would be required by pointing to Fed forecasts that were made in December, which indicated three rate increases for 2022.

“We must see the results,” he stated. We don’t really know what it will look like – that’s up to the supply chain and workers.