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Fed's Lacker: High inflation target "dangerous"
May 2, 2012 / 6:15 PM / 5 years ago

Fed's Lacker: High inflation target "dangerous"

NORFOLK, Va., May 2 (Reuters) - It would be “very dangerous” for the Federal Reserve to adopt a higher inflation target to spur growth in the hopes that it could bring inflation down later when it needed to, a top Federal Reserve official said on Wednesday.

“I don’t think it would be easy to temporarily adopt a higher target and then successfully return to a lower inflation,” Richmond Federal Reserve President Jeffrey Lacker told reporters after a speech. “In fact, I think it would be very dangerous.”

Some economists have suggested that central banks should shoot for higher-level inflation in order to have more room for monetary policy to react to shocks. The Fed currently targets inflation at 2 percent.

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