Fed's Lacker: Fed communication going through 'rocky' patch

WASHINGTON Wed Jun 26, 2013 3:38pm EDT

Federal Reserve Bank of Richmond President Jeffrey Lacker testifies before the House Financial Services Committee hearing on ''Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts'' on Capitol Hill in Washington June 26, 2013. REUTERS/Yuri Gripas

Federal Reserve Bank of Richmond President Jeffrey Lacker testifies before the House Financial Services Committee hearing on ''Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts'' on Capitol Hill in Washington June 26, 2013.

Credit: Reuters/Yuri Gripas

WASHINGTON (Reuters) - A senior Federal Reserve official said on Wednesday the U.S. central bank's communication efforts had been going through a tough patch, after a week of intense market volatility following news it would scale back its bond buying later this year.

"It has been a rocky period over the last couple of months for communication from the Fed," Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, told Bloomberg television.

He also warned the U.S. economy could face a few more years of sluggish growth, but played down fears that current low levels of inflation could push the economy into a damaging deflationary trap.

"The low inflation numbers have given me pause. But I'll have to say I am convinced so far that they appear to be transitory ... I'm pretty confident it will pick up," he said.

(Reporting by Alister Bull)

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