But Fed Chair Jerome Powell has pushed back against the idea that the economy may overheat with additional stimulus, noting in a recent speech that it could take “many years” to overcome scars from long-term unemployment. Even when the jobless rate was at 3.5% a year ago, signs of inflation were scarce.

Should inflation remain broadly tame, widespread vaccinations should allow for a pickup in activities such as travel and help stabilize prices for hotel stays and airfares. The degree to which pent-up demand may drive inflation metrics higher is unclear.

For their part, Fed officials at the January policy meeting “stressed the importance of distinguishing between such one-time changes in relative prices and changes in the underlying trend for inflation,” according to minutes released Wednesday. Such moves “could temporarily raise measured inflation but would be unlikely to have a lasting effect.”

So-called base effects will influence annual changes in inflation. For several months beginning in March, the price indexes will be compared with the same periods a year ago when inflation slowed considerably as the nation shut down to try to contain the coronavirus.

Boston Fed President Eric Rosengren said Wednesday he wouldn’t be surprised to see higher inflation prints in the near term—with some prices moving up and statistical comparisons to the low inflation figures last year—but he also doesn’t expect to see sustained 2% inflation for the next two years as long as unemployment remains high.

But Kansas City Fed President Esther George said earlier this week that price pressures could build as people return to work. Whether there is “broad-based, persistent pressure on prices that requires the Federal Reserve” to change its policy stance will be “among the core of our deliberations over the coming years,” she said.

With assistance from Craig Torres and Steve Matthews.

This article was provided by Bloomberg News.

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