DUBLIN – U.S. inflation is higher than she would like, Federal Reserve Bank of Cleveland President Sandra Pianalto told a conference yesterday at the Global Interdependence Center, according to Bloomberg News.
The Fed “has described our core rate of inflation as being uncomfortably high and has stressed the importance of further moderation in inflation,” she noted, reprising her comments last week in Frankfurt. “Our predominant concern is the risk that inflation will fail to moderate as expected.” Though the subprime mortgage slump has “clearly” affected the economy, she added in response to questions, the housing slowdown has yet to affect consumer spending and other parts of the economy are still “solid.”
“At the present time, inflation expectations appear to be well-anchored,” Pinalto told the conference, “but we cannot afford to be complacent.”
At its meeting June 27 to 28, the Federal Open Market Committee is expected to keep its target for the overnight funds rate at 5.25 percent – the rate it set last June and has maintained since then – economists told Bloomberg News in a recent survey.
