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