The Federal Reserve’s core inflation forecasts for 2022 are at their highest since 2007.
The central bank recently revealed that it may taper its aggressive monetary stimulus. Although the Federal Open Market Committee — which determines the central bank’s monetary policy targets — will continue to pursue a near-zero interest rate, a September 22 <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20210922a.htm">statement</a> indicates that policymakers will “soon” decrease their $120 billion monthly asset purchases.
As <a href="https://www.wsj.com/articles/fed-officials-see-transitory-inflation-lasting-quite-a-while-11632389401?mod=hp_featst_pos4">The Wall Street Journal</a> reports, the move may be a response to the Fed’s median forecast for core inflation reaching its highest levels since the Financial Crisis:
<blockquote>Last September, long before the supply bottlenecks emerged, the median forecast by Fed officials was for core inflation (which excludes food and energy) in 2022 of 1.8%. Every few months since then they have nudged that up, and in the forecasts released Wednesday they see core inflation next year at 2.3%.
While current-year forecasts get pushed around a lot by temporary factors such as a jump in oil prices, the next-year forecast reflects where inflation is expected to settle once temporary factors recede. The message from the Fed’s latest projections is that “transitory” is lasting an awfully long time. Indeed, next year’s projected 2.3% is the highest next-year core inflation forecast since projections were first published in 2007.</blockquote>
The Wall Street Journal adds that six of the eighteen Federal Open Market Committee participants believe core inflation will surpass 2.5% next year.
Although Fed Chair Jerome Powell <a href="https://www.dailywire.com/news/bank-of-england-joins-the-fed-in-warning-of-more-pronounced-inflation">acknowledged</a> recently that inflation “has increased notably,” he believes that price levels will largely moderate within the next several months. President Biden also <a href="https://www.dailywire.com/news/thanks-to-inflation-american-wages-drop-by-nearly-2">believes</a> that “most of the price increases we’ve seen are… expected to be temporary.”
“We also know that as our economy has come roaring back, we’ve seen some price increases. Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view,” said the President.
However, as Rep. Kevin Brady (R-TX) told <a href="https://www.dailywire.com/news/the-bidenomics-issues-every-american-should-know-about-kevin-brady-on-unemployment-taxes-and-inflation">The Daily Wire</a> last month, both the Federal Reserve and the White House share responsibility for the rising price levels; indeed, both are “in denial about the seriousness and the length” of inflation. 
“Both the Fed and the White House have been very slow to recognize the role they’re playing in driving these higher prices,” he said. 

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Fed Inflation Projections For 2022 Are Highest Since 2007