« Greenbacks for Greenspan | Main | It's My Party and I'll Protest If I Want To »

Wednesday, March 08, 2006

Fed Speak Says Watch Inflation Expectations

Chicago Fed president Michael Moskow says to keep an eye on inflation expectations in a speech given today on the U.S. economic outlook:

Moskow Says Faster Inflation Outlook Would Boost Rate, Bloomberg: A rise in expected inflation ... would require further increases in the Federal Reserve's main interest rate, said Michael Moskow, president of the Chicago Fed. "The next policy decision is much less certain now than it was" ... If measures of inflation expectations "were to rise persistently, then policy would clearly have to be tightened further." ...

St. Louis Fed President William Poole also warned of inflation risks today should the economy grow too rapidly, according to a report by Reuters. ...

Here's the Reuters report on Poole's remarks:

Interview-Stronger data may mean more rate hikes-Fed's Poole, Reuters: The U.S. economy has a "great deal of momentum" and the Federal Reserve may have to raise interest rates further. ... St. Louis Federal Reserve President William Poole ... said he thought the Fed was already close to neutral. But he favored overstepping this mark and making monetary policy restrictive, if there was any doubt, rather than risk letting inflation get out of hand. "If the inflation rate rises in a sustained fashion and particularly if inflationary expectations start to develop, that is a harder process to reverse. ... "I think that if it turns out that policy-tightening has overshot the mark, then we ease off." ...

William Polley has more.

    Posted by on Wednesday, March 8, 2006 at 12:14 AM in Economics, Fed Speeches, Monetary Policy | Permalink  TrackBack (0)  Comments (3)

    TrackBack

    TrackBack URL for this entry:
    https://www.typepad.com/services/trackback/6a00d83451b33869e200d83479d9e053ef

    Listed below are links to weblogs that reference Fed Speak Says Watch Inflation Expectations:


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.