Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Fed's Lacker says he is confident inflation will return to 2 percent

Published 21/03/2016, 08:31
© Reuters. Federal Reserve Bank of Richmond President Jeffrey Lacker testifies

PARIS (Reuters) - U.S. inflation will likely accelerate in coming years and move toward the Federal Reserve's 2 percent target, Richmond Fed President Jeffrey Lacker said on Monday.

Inflation has been unusually sluggish since the 2007-2009 recession.

The Fed has kept interest rates low in part to foster faster price gains and said last week it was likely to raise interest rates more slowly than policymakers had expected in December.

The U.S. central bank noted in its Wednesday policy statement that financial market-based measures of expected inflation were low.

"Although recent declines in inflation compensation do give me some pause, I think the evidence indicates that inflation expectations ... remain well-anchored," Lacker said at an international central banking conference in Paris. He cited studies that suggest public expectations of inflation guide actual price changes.

Lacker, known as a hard-liner on the Fed's duty to keep inflation from running much above 2 percent, said U.S. inflation was bound to increase significantly after the price of oil bottoms out. He said inflation outside food and energy would move back toward 2 percent once the U.S. dollar stops appreciating.

© Reuters. Federal Reserve Bank of Richmond President Jeffrey Lacker testifies

Lacker is not a voting member on the Fed's rate-setting committee this year but participates in its discussions.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.