Inflation "could get out of control" soon according to economic expert

Kristen Walters
A dollar bill.Reno Mark/Getty Images (Canva Pro license.)

During a panel talk at Columbia University, St. Louis Federal Reserve President James Bullard gave a stark warning that runaway inflation "could get out of control" and "become a serious problem" if the central bank does not step in soon and adjust interest rates.

Economic reports released earlier this month by the US Labor Department revealed that the cost of food, housing, and utilities just reached a 40-year all-time high. According to some reports, the average American household pays between $250 and $300 more for basic living expenses per month compared with this time last year.

While moderate increases of inflation over time are considered normal, if inflation continues to surge out of control, the US could reach a state of hyperinflation, which is terrible for the economy. When the economy is in a state of hyperinflation, the value of currency rapidly diminishes. In other words, you won't be able to buy as much in the future as you can today with the same amount of money.

Bullard believes that inflation simply won't go back down or "dissipate" on its own, as many other economic analysts have suggested. If the Federal Reserve doesn't take "aggressive action" soon, he believes that the US will see more significant increases in inflation over the coming months.

Bullard believes that the right course of action is for the Fed should raise interest rates by an entire percentage point to help curb the ongoing spikes in inflation. Hopefully, something is done soon, or we may all be faced with less buying power in the near future as prices of consumer goods continue to escalate.

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