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© Reuters. FILE PHOTO: Federal Reserve Vice Chair for Supervision Randal Quarles addresses the Economic Club of New York in New York City, U.S., October 18, 2018. REUTERS/Brendan McDermid/File Photo

(Reuters) – The supply chain imbalances and higher demand currently leading to higher inflation are transitory and the U.S. Federal Reserve has the tools to respond if inflation remains elevated for longer than anticipated, Fed Vice Chair for Supervision Randal Quarles said on Monday.

“If a year from now we were not to see inflation settling back down to something that’s closer to our 2% target … we have the tools at the Fed to then begin – as we traditionally would – to increase interest rates, to change our monetary policy in a way that would address that inflation,” Quarles said during the annual Utah Bankers Association Convention. “We’re not behind the curve.”