Investing.com - Richmond Federal Reserve president Jeffrey Lacker said on Wednesday that the case for a rate hike was bolstered by recent data and that the U.S. central bank should concentrate on fostering economic growth via its control of inflation.
In a speech delivered at The Johns Hopkins Carey Business School in Baltimore, Lacker explained that the fact that the natural real rate is at or just above zero and stated that “this perspective would bolster the case for raising the federal funds target rate”.
Though the Richmond Fed chief noted that inflation was currently before the Fed target of 2%, he noted that measures of inflation expectations still suggested that it would move back towards that level in the medium term.
Furthermore, Lacker reminded listeners that it was not the Fed’s responsibility to prevent every recession or soothe every financial crisis, but should concentrate on providing the economy with a basic monetary stability.
“In my view, the most important contribution central bankers can make to economic growth is low and stable inflation,” he concluded.
Lacker is known for his hawkish policy stance and does not have a vote this year on the Federal Open Market Committee (FOMC), Fed body responsible for rate decisions.
The next Fed policy meeting is scheduled for March 15 and 16 and will be accompanied by updated economic forecasts along with a posterior press conference by Fed Chair Janet Yellen.