During a discussion at Columbia University, the head of the St. Louis FRB, James Bullard, warned that without urgent action to raise interest rates, inflation could worsen further, writes CNBC.

“Now we are at greater risk than ever; inflation could get out of hand,” he said, calling for a full percentage point rate hike by July.

According to Bullard, one scenario could be "a new surprise that we can't foresee right now, but inflation will rise even more."

Recently, Bullard, a notorious hawk at the Fed, has already called for decisive action in the form of a full percentage point rate hike to contain inflation pressures which are highest level for 40 years. Inflation report for January showed that YoY growth of consumer prices accelerated to 7.5%.

However, Fed officials have resisted monetary tightening for much of the past year, insisting that the current spike in prices has more to do with pandemic-specific temporary factors: supply chain disruptions and excessive demand for goods as opposed to services.

The Fed indicated at its recent meeting that it is likely to start raising interest rates in March, its first interest rate hike in more than 3 years. After that, there may be an additional 5 or 6 increases of 25 basis points.