SAN FRANCISCO, March 31 (Reuters) – U.S. Federal Reserve Governor Christopher Waller on Friday stated current knowledge is in line with the notion that the U.S. central financial institution could possibly drive down inflation with out critical hurt to the labor market.
If folks actually have begun to consider that costs are going to simply carry on rising, then defeating excessive inflation might require dramatic actions by the Fed to puncture these expectations, Waller stated in remarks ready for an educational convention on the San Francisco Fed.
Dramatic Fed charge hikes might sluggish the economic system all of a sudden and result in massive job losses.
But when what’s driving greater costs is a sudden rise within the frequency at which companies reset their costs — a concept for which Waller stated there’s some proof — then “inflation will be introduced down shortly with comparatively little ache when it comes to greater unemployment,” he stated. “Latest knowledge are in line with this story.”
Extra knowledge can be wanted to determine “which story is true,” he stated.
Reporting by Ann Saphir; Enhancing by Sandra Maler
Our Requirements: The Thomson Reuters Belief Ideas.
