Federal Reserve Vice Chair for Supervision Randal Quarles believes that the strong US recovery suggests inflation risks are tilted to the upside, however, the recent spike is likely temporary. Quarles said signs of a recent uptick in inflation, which included a 4.2% jump in consumer prices in the year to April, was probably transitory, driven in part by supply bottlenecks that will subside. He said, ‘I agree with the widespread view among my colleagues on the Federal Open Market Committee and most private forecasters that the recent rise in inflation to well above 2% is driven by temporary factors’ adding ‘I expect inflation to begin subsiding at some point over the next several months and to be running close to 2% again at some point during 2022’.
Also, for the first time since Biden took office, trade negotiators from the US and China had their first call stressing the significance of improving their bilateral trade ties. In a statement the US Trade Representative Katherine Tai and China's Ministry of Commerce Vice-Premier Liu He said the two had a ‘candid and constructive’ discussion. ‘The two sides conducted candid, pragmatic and constructive exchanges in an attitude of equality and mutual respect. The two sides believe that the development of bilateral trade is very important, and they exchanged views on issues of mutual concern and agreed to continue to communicate’ the statement noted.