Fed's Lacker sees risk in waiting too long to exit
U.S. central bankers should not let pockets of weakness in the economy distract them from fighting inflation, Richmond Federal Reserve Bank President Jeffrey Lacker said on Wednesday.
In remarks to the Charlotte Chamber of Commerce that echoed recent pronouncements, Lacker said a worldwide pick-up in economic activity was boosting demand for U.S. exports.
Meanwhile, he added, the housing and auto sectors are no longer drags on growth, although employment and commercial real estate continue to present serious hurdles.
These contrasts will make it difficult for the Fed to correctly time an eventual pullout from its unprecedented emergency measures, including record low interest rates and over $1 trillion of credit pumped into the financial system.
I will be looking for the time at which economic growth is strong enough and well-established enough, even if it is not yet especially vigorous, he said. We cannot be paralyzed by patches of lingering weakness.
Lacker, a voting member of the Fed's rate-setting committee, is widely viewed as one of the most aggressive anti-inflation hawks on the central bank.
He was opposed to a number of the central bank's emergency lending facilities, particularly ones that target specific sectors of the economy like housing.
(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)
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