On Friday’s broadcast of NPR’s “Here and Now”Susan M. Collins, President and CEO of Federal Reserve Bank of Boston stated that the major factor behind the dramatic rise in prices is climate change.
Collins said, [relevant remarks begin around 2:10] “The Fed, of course, is monitoring, holistically, all of the different kinds of information, from what’s happening with households, with firms. In terms of the different components of price inflation, there are lots of factors that have led prices to be rising so rapidly. Some of them are factors on the supply side that the Federal Reserve really doesn’t have much influence over at all. And that includes things like longstanding — things like weather conditions. It also, particularly in the food — the bird flu has taken a real toll on, for example, egg prices. And climate change also has impacts. So, there are a lot of longstanding factors and reasons that food prices are traditionally very volatile. And that is certainly impacting households and one of the things that I am very concerned about.”
Collins added that she believes inflation will decline over this year and eventually reach the Federal Reserve’s target rate of 2%.
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