New data on Thursday is expected to show the U.S. inflation rate is still at its highest level, but Federal Reserve (Fed) policymakers are hoping that its peak may be getting closer.
Atlanta Fed President Raphael Bostic says that there is some evidence that inflation is at its peak and may start to decline by the middle of the year.
Also in a separate comment, Cleveland Fed President Loretta Mester also expects inflation to ease this year as the Fed continues to exercise tightening.
The key consumer price index (CPI) is expected to rise 7.3% in January on an annual basis from 7.0% previously which has shocked the market thus prompting the Fed to accelerate its tightening plans.
However, the month-on-month rate of change is declining, a sign the economy may have adapted to the supply chain and other problems posed by Covid-19.
At a recent FOMC policy meeting, the Fed had signaled to start raising interest rates in March. But there is no clarity on how much the Fed needs to do to tackle inflation.
