Federal Reserve Bank of Richmond president Jeffrey Lacker Tuesday said the Fed cannot “take for granted” that the upsurge in inflation will be temporary, and so must act to confirm expectations that inflation will be low over time.

Lacker, in remarks prepared for delivery to business and community leaders in Arlington, Va., did not say when he thinks the Fed should tighten monetary policy, but said the pending conclusion of the $600 billion program of quantitative easing “should be the high-water mark” for monetary stimulus.

He added that the Fed may well need to tighten before unemployment falls to where the Fed wants it to be over the long run.

Though he expects inflation to subside, Lacker warned that inflation can rise even in the face of subpar economic growth.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.