IMF’s Gopinath sees risk of de-anchoring U.S. inflation expectations By Reuters

© Reuters. Economic Counsellor and Director of the Research Department at the International Monetary Fund (IMF) Gita Gopinath speaks during an interview with Reuters in the Alpine resort of Davos, Switzerland May 23, 2022. REUTERS/Arnd Wiegmann

NEW YORK (Reuters) – U.S. inflation could remain above the Federal Reserve’s targets for a long time based on current projections, and there is a risk of inflation expectations “de-anchoring,” International Monetary Fund First Deputy Managing Director Gita Gopinath said on Wednesday.

Based on current projections of what the interest rate path may be, inflation will stay above the Fed’s 2% target “for a long time,” said Gopinath, speaking at an online event hosted by the Financial Times.

U.S. Treasury Secretary Janet Yellen said separately on Wednesday that the current annual inflation rate of 8% is “unacceptable” for the United States and 2% is an “appropriate target.”