Fed’s Mester: Policymakers need to figure out how much of inflation is driven by supply side

• Much of inflation this year has been driven by components related to the pandemic that may not lead to inflation to continue rising
• If we see inflation and longer run inflation expectations move up she would take that as an indication that demand side factors are playing a much bigger role than anticipated
• That is not the baseline at the moment

We've heard different riffs on these same themes from Mester for awhile but there is more granularity here and growing concern about inflation. The line 'for the moment' suggests her feeling could change any moment.