The US Federal Reserve chairman said he expects inflation to remain high through next year as well, but added it would eventually decline.
Jerome Powell said Wednesday it is "frustrating" to see bottlenecks in production due to high demand and supply chain problems that are not improving.
"We see that continuing into next year probably, and holding up inflation longer than we had thought," he said at the European Central Bank (ECB) Forum on Central Banking 2021 via video conference.
"The current inflation spike is really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy, which is a process that will have a beginning, a middle, and an end," he said.
Although Powell said the level of inflation would eventually decline, he added: “It’s very difficult to say how big those effects will be in the meantime or how long they will last.”
The consumer price index (CPI) in the US rose 5.3% in August on an annual basis, after climbing 5.4% in June and July. The producer price index (PPI) soared 8.3% in August annually, after jumping 7.8% in July, according to the latest figures from the US Labor Department.