ST. LOUIS – Inflation is rising at the fastest pace in decades, impacting the costs of food, transportation and many essentials of everyday life. One leader with the Federal Reserve Bank of St. Louis is looking to tackle that situation.

James Bullard, president of the St. Louis Federal Reserve Bank, held a presentation Thursday in Arkansas on “The First Steps Toward Disinflation in the U.S.” Disinflation represents a decrease in inflation rates by temporarily slowing the pace of which goods and services rise. The Federal Reserve can promote disnflation by raising interest rates, among other actions.

On Thursday, Bullard said the Federal Reserve is working to return to a 2% target for inflation. The current inflation rate on a year-to-year measure is 6.3%. Bullard says while market interest rates have increased substantially, U.S. labor markets remain robust.

Bullard also cited the discrepancy between U.S. gross domestic product (GDP) and U.S. gross domestic income (GDI). GDP represents the total value of goods and services produced domestically, while GDI is the total value of income earned domestically. For economic balance, GDP and GDI are supposed to be equal. T

Some of the latest figures from the Bureau of Econoimc Analysis show GDP has been growing faster than potential throughout a significant portion of the year. However, Bullard says the GDI measure appears to be more consistent with observed labor markets, suggesting the U.S. economy continues to grow.

Among the first steps toward disinflation cited, the Fed has raised the policy rate and has promised to raise the policy rate further in the future. The Fed has begun passive balance sheet reduction.

“Forward guidance on these dimensions is helping the Fed move policy more quickly to the degree necessary to keep inflation under control,” according to Bullard’s presentation.

For a closer look at Bullard’s presentation, click here.