By Steven K. Beckner
RICHMOND, Va. (MNI) – Federal Reserve Governor Elizabeth Duke
downplayed risks that the Fed’s aggressive monetary easing of recent
years will lead to higher inflation Friday.
But she vowed that the Fed will be vigilant against higher
inflation.
Duke, answering questions following a luncheon speech to the
Virginia Bankers Association and the Virginia Chamber of Commerce, said
weak loan demand and resource “slack” is so far keeping wage and price
increases moderate.
In her text, Duke anticipated inflation will “settle over coming
quarters at or below levels consistent with the Federal Reserve’s dual
mandate.”
“In this environment, I believe that the current stance of monetary
policy is appropriate,” she said.
An audience member asked Duke how she could not worry about greater
inflation “considering the trillions of dollars the government is
printing.”
“First of all, there’s not a lot of sign that the dollars we put
into system are being actively lent,” Duke replied, adding that “loan
demand is very weak.”
What’s more, she said, “there’s a lot of slack in economy, and
there don’t appear to be pressures there to create inflation.”
“But it’s something we watch pretty carefully and pay a lot of
attention to,” Duke added.
** Market News International **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,M$$BR$]