Narayana Kocherlakota is brushing off recent reports of accelerating inflation.
“[Y]ou can see that PCE inflation has risen relatively rapidly over the past three months and is now 1.8 per cent — very close to the FOMC’s target,” he said in a speech today. “But … many large fluctuations in PCE inflation end up being purely transitory. To formulate an accurate forecast for inflation, we need to look through these transitory fluctuations, no matter how large they might be — and that’s not always easy.”
Kocherlakota, a voting member of the Federal Open Market Committee, is considered one of the more dovish monetary policymakers.
His speech is clearly more dovish than the speech of Richmond Fed President Jeffrey Lacker who is confident that the inflation rate has “bottomed out.“
Read Kocherlakota’s full speech at MinneapolisFed.org.
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