Even the Fed's forecast suggests inflation above 2% for at least a couple of more years, Ferguson, who is now vice chair at The Business Council and a distinguished fellow for International Economics at the Council on Foreign Relations, told the CNBC Small Business Playbook virtual event on Thursday."So there should be the expectation inflation will be bit of a challenge," he said.
For small businesses, this means there will continue to be specific materials and commodities where supply remains limited, and inflation high, and while it will look like inflation may be getting marginally better, that will be incremental in the macro sense, and not the case with every single input cost. Labor costs will remain high though wage inflation should begin to slow too.
And while Powell was clear that some factors might be outside their control ,"he was clear that he sees a credible path toward bringing inflation back down to the target of around 2%, and doing so in a way that is soft or a 'softish' landing," Ferguson said.