Fed can exit from current policy only very gradually amid temporary inflation – Goldman Sachs

Jan Hatzius, Chief Economist at Goldman Sachs, believes that there are strong reasons to support the view at the Federal Reserve (Fed) that inflation is temporary.

Key quotes

“Sees expiring enhanced unemployment benefits in the months ahead as likely to prompt workers back to their jobs, which will subtract from wage pressures.”

“The current rise in prices is being driven by outliers that will soon dissipate, resulting in prices coming back to normal levels ahead.”

"This suggests that Fed officials can stick with their plan to exit only very gradually from the easy current policy stance.”