President JEFF Schmid said that as the consumer’s expectations for the future prices soared on Thursday, they grew more carefully about the decline in inflation.
Schmid said at a speech at the US Agricultural Committee in Arlington, Virginia, “It’s not time for inflation to disappoint our security guard with the highest 40 -year high.”
“Some of the factors that induce inflation expectations are likely to be one -time development, but given the recent experience, I will not be willing to have a chance.”
His opinion came after a new investigation Conference board Consumers’ trust has been the largest monthly decrease in almost four years, and the expectation of inflation in the future has increased from 5.2%to 6%due to high egg prices and concerns about the new Trump administration’s tariffs.
Schmid suggested that uncertainty could affect growth, according to his discussion with his earth’s contact information and recent data.
“This suggests the possibility of the Fed’s need to balance the risk of inflation and growth,” he said.
The recent reading of the Fed’s first inflation goal, “Core” personal consumption expenditure (PCE) index comes on Friday.
As a separate gauge, the Consumer Fricte Index (CPI), is more likely to maintain interest rates in the near future, as the inflation is hotter than expected in January.
The Fed is expected to keep the interest rate steadily at the March 18-19 policy meeting on March 18-19 after cutting 100 Basis points in three consecutive meetings last fall.
Thursday, Schmid pointed out the lessons of the 1970s and 1980s, and said that inflation can secure the expectation and price setting process by responding to data softening data before inflation can win.
He also warned that once inflation was included in expectations, it was much more painful to overcome.
Schmid also said that it can be “preferred to replace the current inflation with inflation, excluding energy prices.” Because food prices are not volatile and do not believe that they are part of daily spending on households.
The Federal President Tom Barcin Richmond also warned of the lessons of the 1970s this week.
Barkin said he wants to keep interest rates “properly limited” until they get more trust.
Barkin said, “It is important for us to maintain a firm state. “If we withdraw inflation in the 70’s, we learned that it could appear again. No one wants to pay the price.”
