Economists: expect inflation to stick around, but it’s not time to panic

On Tuesday, the U.S. Treasury Secretary and Chairman of the Federal Reserve testified in front of a Senate committee commenting on rising inflation rates.

Federal Reserve Chairman Jerome Powell said he expects inflation to last into the middle of next year and that the Fed is ready to step in and try and cool down or slow down the economy if needed.

"At this point, the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases… Perhaps a few months sooner," Powell said.

University of Minnesota Professor of Economics, V. V. Chari says the Delta variant had a large impact on inflation rates. He says, worldwide, more people stayed home or stayed out of the workforce once the variant hit due to fears of getting sick.

"If there aren’t enough truck drivers, people willing to drive trucks, then you’re going to have supply chain problems," Chari said.

Those supply chain problems throw supply and demand out of sync and cause rising prices. He says while he expects those prices to keep rising in the short term, it’s not time to panic.

"Nobody is forecasting inflation of the kind that we saw in the 70s when inflation rates were 10, 12, 13 percent," Chari said.