The head of the Kansas City Federal Reserve Bank says supply-chain issues are healing, but warns there could be more disruptions ahead.

Esther George told the Economic Club of Indiana the shortages of some goods are a pandemic aftershock. George says pandemic lockdowns around the world, and the uneven patterns of reopening, “jumbled” the supply chain.

She says increases in inventories and imports indicate those issues are improving. But she warns there’s still instability, especially with the recent surge of the Omicron variant. And she says she’s particularly concerned about China, which is still instituting lockdowns in pursuit of its “zero COVID” policy. With China a critical link in manufacturing and shipping, she says there’s still a risk of disruptions.

George says the labor shortage has affected the supply chain too, though she says shipping bottlenecks appear to be loosening as well.

She says a disproportionate number of workers leaving the labor force have been women, suggesting a lack of child care in the pandemic has been one factor in the shortage.

And George says retirements have been a factor — not the volume of veteran workers calling it a career, but the absence of what usually is a steady flow of retirees who come back to work, either because they need the money or miss staying active.

Those un-retirements have slowed down noticeably. George suggests those workers may be wary of the COVID pandemic, or may have larger nest eggs than their predecessors due to a climbing stock market and rising home values.

George says strong growth in production, wages, and consumer spending all point to an economy that’s rebounding in a big way. But she says that creates a new set of challenges, starting with a 40-year high in inflation.

George says rising prices reflect the classic definition of inflation as “too much money chasing too few goods,” with inventory bottlenecks creating scarcity at the same time consumers are ramping up spending — and focusing that spending on goods rather than services, with more people skittish about going out due to COVID-19.

The Fed has said it plans to nudge interest rates higher this year, and reduce its holdings of securities it bought to prop up the economy during the recession 13 years ago.

George says the booming economy means it’s time to work those levers to help rein in inflation and make room in the securities market for private money But she warns it may be “bumpy” as the Fed tries to balance those maneuvers to make that shift gradual.