San Fran Fed. President: Inflation Will Get to about 2.5% by ‘End of 2023,’ about Half of High Inflation Is ‘Excess Demand’

During an interview with the Fox Business Network on Friday, San Francisco Federal Reserve President Mary Daly stated that she sees inflation coming down to around 2.5% by the end of 2023, and that around half of the high inflation we’re seeing right now is due to excess demand with the other half being due to supply chain issues due to coronavirus disruptions in Asia and due to the war in Ukraine.

Daly stated, [relevant remarks begin around 2:50] “[O]nly about 50% of the high inflation we’re seeing really can be traced back to demand, excess demand. The other is about supply chains and those are caused by not only the ongoing COVID disruptions in Asia in particular, but also the war in Ukraine.”

She later added, “My timeframe is, you start to see it come down this year. That has to happen. You have to see that happen here. We know we need to do more. And then, by the end of 2023, I see it coming back down to the 2.5, something around that level, and then continuing to move towards our target. But really, I’m looking for getting some relief for American households and businesses this year.”

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