NORFOLK, Va. — It is “quite unlikely” the Federal Reserve will further ease monetary policy to aid the sluggish recovery, even though economic growth has been slower than expected, Federal Reserve Bank of Richmond president Jeffrey Lacker said Thursday night.

“I still expect growth [to be] about 3% for the whole year,” Lacker told reporters, “That’s a bit of a markdown from a couple of months ago.”

Lacker said it could take up to two years for the Fed to call the recession over, noting that it is unlikely that a double-dip recession will occur anytime soon.

Earlier, Lacker spoke of the difficulty the Fed will face in determining the proper time to begin tightening monetary policy, with officials wary of hiking interest rates too soon and threatening the fragile economic recovery.

In remarks prepared for the Hampton Roads Virginia Regional Forum, Lacker predicted that while inflation is likely to drift upwards in coming quarters — barring unanticipated shocks — inflation expectations are stable.

That stability implies confidence that the Fed will act to keep inflation low and stable as the recovery continues, he said, a confidence that will make monetary policy challenging.

“The difficulty, of course, is that no one wants to tighten policy prematurely and needlessly dampen the recovery,” Lacker said. “So recognizing the right time to begin normalizing our monetary policy settings is going to be hard, and reasonable people can differ.”

— Market News International

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