WASHINGTON (AP) – Federal Reserve Vice Chairman Stanley Fischer said Monday that inflation in the U.S. may be starting to tick up from too-low levels, a key condition for further interest rate hikes.
“We may well at present be seeing the first stirrings of an increase in the inflation rate – something that we would like to happen,” he said in a speech in Washington.
However, another Fed official, Lael Brainard, expressed uncertainty about whether an improving job market would be enough to bolster inflation, given persistently low oil prices and a strong dollar. Inflation has “persistently underperformed” relative to the Fed’s target of annual price gains of 2 percent, she said in a separate speech Monday.
The two Fed officials’ views underscore how the Fed is wrestling with a prolonged period of muted price gains and its timetable for rate hikes. In December, the Fed raised its key rate from record lows.
Policymakers did not raise rates at its January meeting, and officials are expected to leave rates unchanged when they meet again on March 15-16. Many analysts don’t expect another rate hike until June at the earliest.