The president of the Chicago Federal Reserve said he still thinks a surge in U.S. inflation this year will largely fade away by 2022, though he admitted he’s less certain about how quickly it will happen.

Read: The cost of living surges, CPI shows, as inflation spreads through economy

Charles Evans, head of the Chicago Fed, said in a webcast the central bank will get a clearer idea on the path of inflation by the end of the year. Like other top Fed officials, he’s blamed the recent spike in the cost of living on the reopening of the economy and the resulting shortages of supplies and labor.

Read: A ‘notable’ increase in inflation will ease soon, Powell tells Congress

Yet unless wages across the country rise a lost faster — so far they haven’t — Evans predicted inflation will still taper off over the next two years as these shortages go away. Higher labor costs are widely viewed as a necessary ingredient of higher inflation in the long run.

“I think we need patience,” he said, echoing a constant refrain among top Fed officials.

Read: A ‘robust’ U.S. economy is strengthening, Fed’s Beige Book finds, but it’s grappling with big shortages and higher inflation

Evans acknowledged the U.S. jobs market has not recovered as fast as he expected. Businesses are still struggling to hire workers, he said, even though unemployment remains fairly high.

While many companies are raising wages and benefits to attract workers, Evans said they are going about in “clever” ways to limit the long-term increase in their labor costs. Onetime bonuses have been particularly common, he said.

The Fed in June sharply raised its estimate for inflation in 2021 to 3.4% from just 1.8% as recently as December. The increase in prices is then forecast to slow to 2.1% by the end of 2022.

Evans said it’s been hard to forecast the economy during the pandemic and that he could be wrong about inflation, but he’s sticking to his guns.

He also pointed out investors seem unworried about inflation. The stock market


keeps going up and bond yields

have tumbled recently. Normally the reverse would happen if inflation were viewed as a threat.

“I am comfortable with where we are going and markets seem comfortable too,” he said.

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