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Veteran Fed official: US inflation way too high
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Posted by ian 1 year 312 days ago (theaustralian.news.com.au). Views: 39
Tags: inflation federal reserve economy |
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A VETERAN US central bank official said today he's worried about a deteriorating inflationary environment, and suggested that when the Federal Reserve begins to raise rates, it could do so swiftly.
Federal Reserve Bank of Kansas City president Thomas Hoenig said rising inflationary pressures are "troublesome" and a "serious" matter, and now stand at "unacceptably high levels."
He added, "the bigger concern is that these increases are beginning to generate an inflation psychology to an extent that I have not seen since the 1970s and early 1980s."
Mr Hoenig fretted further that "there is a significant risk that higher inflation will become embedded in the economy and require significant monetary policy tightening to reduce it."
He tied rising prices primarily to overseas factors, including a "sizeable decline" in the US dollar's value, and noted that given the long running rises in food and energy prices, he is increasingly focused on movements in overall inflation.
Fed officials have long looked more closely at so-called "core" measures, which strip out food and energy moves, believing they predict future overall inflation rates more reliably.
Mr Hoenig spoke in comments prepared for delivery before the Economic Club of Colorado and in response to audience questions. The remarks as given deviated from the text, although not in a substantive fashion.
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