The President of Federal Reserve Bank for Philadelphia Charles Plosser announced that the slow down in the US inflation to the lowest rate in three years may not be a concern for Federal Reserves policy, Bloomberg reported.
Should inflation expectations begin to fall, we might need to take action to defend our inflation goal, but at this point, I do not see inflation or deflation as a serious threat in the near term, which was Plossers statement in Stockholm today.
The Federal Open Market Committee confirmed its intentions of keeping the policy of bond buying, as the process could be accelerated or decelerated in accordance with the situation with inflation and labor market.
Plosser also said that labor market conditions might scale back the pace of bond purchases until the next financial leaders meeting and expressed his concerns about a reversal in current labor market trends, which could not match his forecast of about 7% unemployment rate by the end of 2013. According to Bloomberg, Plossers expectations regarding US economic growth are as much as 3% for this year and for 2014.
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