While the national economy suffered through a “soft patch in activity” for the first three months of this year, growth should gain strength going forward, according to Federal Reserve Bank of New York president William Dudley.
Recovery has proceeded at “a good pace” in New York and “New Jersey has shown signs of turning the corner in the last two months. Puerto Rico may have bottomed out,” Dudley said at the quarterly regional economic press briefing in New York City, according to prepared text released by the Fed.
Commodity prices, which fell Thursday, are not expected to surge from current levels, so headline inflation should recede to “a mandate-consistent rate,” Dudley said.
But he added: “It is critical that we ensure that inflation expectations do not become unmoored. It is much harder to keep inflation in check if people begin to raise their expectations of inflation. At this point, measures of inflation expectations overall remain stable.”