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

The Pak Banker - - COMPANIES/BOSS -

US 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 wellan­chored," Lacker said at an in­ter­na­tional cen­tral bank­ing con­fer­ence in Paris. He cited stud­ies that sug­gest pub­lic ex­pec­ta­tions of in­fla­tion guide ac­tual price changes.

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