Fed's Fisher says inflation a growing concern: PBS

WASHINGTON (Reuters) - Inflation is a growing source of worry and has started to infect expectations, Dallas Federal Reserve Bank President Richard Fisher said on Tuesday, in remarks that hint at opposition to further interest rate cuts.

"I'm more concerned about inflation than I have been of late. It's a growing concern. We see it particularly in commodities and energy products," Fisher told Public Broadcasting Service's Nightly Business Report.

A transcript of his interview, conducted on Tuesday, was available in advance of its broadcast.

"The question is, will it feed into expectations of consumers and business women and men here in the United States? And I do have a concern that it's beginning to feed into expectations and that's something we worry about at the Federal Reserve," Fisher was quoted as saying.

Fisher, a voting member of the Fed's interest rate-setting committee this year, dissented against a half-point Fed rate cut on January 30 in favor of leaving rates at 3.5 percent.

He declined to signal which way he would vote at the next Fed rate meeting, on March 18, but stressed he would like to see price pressures abate.

"We could be in for a period of prolonged inflationary pressure. Our job is not to accommodate that at the Federal Reserve," he cautioned, citing mounting demand for energy and food from fast-growing nations like China and India.

Fisher also stressed that monetary policy acts with a lag of six months or more, and said this should be kept in mind as the central bank reviews how to balance its goals of price stability and employment.

"We have to be very careful to work with the assumption that we can change courses radically, that we can suddenly shift our monetary policy. That's not the way central banks typically operate," Fisher said.