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Friday, February 10, 2006

Moskow: Inflation Pressures May Force Further Increases in the Target Interest Rate

Chicago Fed president Michael Moskow says rates may need to go up further to reduce inflationary pressures. Here's the Bloomberg report (full speech):

Moskow Says Rates May Need to Rise to Stem Inflation, Bloomberg: The Federal Reserve may need to keep raising the benchmark U.S. interest rate to prevent inflation from accelerating, Chicago Fed Bank President Michael Moskow said. "There are risks to the inflation outlook -- namely, the potential for energy cost pass-through, pressures from increases in resource utilization, or rising inflationary expectations,'' Moskow said in a speech... "If inflation or inflation expectations were to rise persistently, then policy clearly would have to be tightened further.'' ... "The economy is operating close to potential,'' he said. "We need to carefully monitor for the emergence of any economy-wide resource pressures.'' ... Decisions about future changes will depend on incoming information on the economy, Moskow said. If economic growth stalls as the housing market slows, the Fed may even have to reduce rates...

    Posted by on Friday, February 10, 2006 at 12:20 AM in Economics, Fed Speeches, Inflation, Monetary Policy | Permalink  TrackBack (0)  Comments (1)

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