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The Fed: Fed tells Congress the inflation pickup seen this year is not a surprise

AFP/Getty Images
A view of the Federal Reserve in Washington, DC.

The Federal Reserve told Congress Friday that the rise in inflation witnessed since 2017 was expected and the central bank can continue to raise interest rates gradually.

“Federal Reserve policymakers expected inflation to move higher in 2018. This expectation appears to be on track so far,” the Fed said in its semi-annual report to lawmakers on monetary policy.

Some economists, including former Fed chairman Ben Bernanke, are worried the Trump tax cut will cause the economy to overheat, pushing up inflation and forcing the Fed to rapidly raise interest rates. Other economists said the new and proposed trade tariffs will also boost inflation.

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