Fed's Lacker: jobs threshold could preclude action on inflation

CHARLOTTE Mon Dec 17, 2012 2:57pm EST

CHARLOTTE (Reuters) - The Federal Reserve's new pledge to keep interest rates low until unemployment falls to at least 6.5 percent could keep the U.S. central bank from moving quickly to head off unwanted inflation, a top Fed official said on Monday.

The Fed's low-rate pledge is good for only as long as the inflation outlook stays below 2.5 percent, the central bank said when it adopted the threshold last week.

But Richmond Fed President Jeffrey Lacker told reporters after a speech here that he worries the newly adopted unemployment threshold could tie the Fed's hands and prevent a "preemptive move" against rising inflation.

Lacker dissented against the Fed's decision.

(Reporting by Rick Rothacker; Writing by Ann Saphir; Editing by Chizu Nomiyama)

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