CHARLOTTE, NC — Federal Reserve Bank of Richmond president Jeffrey Lacker warned again yesterday that the Fed cannot afford to wait too long to tighten monetary policy if it is to avoid an acceleration of inflation.
Lacker, a voting member of the Fed’s policymaking Federal Open Market Committee, also said the Fed shouldn’t tighten too soon and hurt the recovery, but put more emphasis on the need to avoid undue delay.
Lacker, in remarks he prepared for delivery to the Charlotte Chamber of Commerce, reiterated his view that the central bank should begin withdrawing monetary stimulus when “economic growth is strong enough and well-enough established, even if it is not yet especially vigorous.”
He noted, “Earlier this year some economists were highlighting the risk that the low level of economic activity could push the rate of inflation down, perhaps even below zero.”
But “the risk of a substantial further reduction in inflation has diminished substantially since then,” he said.
— Market News International
