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PALO ALTO, Calif. (Reuters) – Federal Reserve Bank Chairman Robert Kaplan told the US central bank on Friday that he had decided to leave interest rates unchanged in the face of controlled inflation. . She must remain alert to the threat. soaring prices.
In an essay prepared to be published at a conference on monetary policy organized by the Hoover Institution, Kaplan said it expects the US gross domestic product to increase by about 2.25% this year, a slower pace than last year, but fast enough to further tighten labor markets. wage growth.
However, Kaplan did not echo the view of Fed Chairman Jerome Powell earlier this week that much of the recent weakness in inflation stems from temporary factors. Powell, in his comments after the close of the Fed's two-day political meeting, was forecasting a return to the 2% target of the US central bank, these factors disappearing from the data.
Instead, Kaplan said that low inflation figures could simply be a by-product of structural changes in the economy, for example when technology companies such as Amazon and Lyft provide goods and services at lower prices; and that companies seek mergers to gain influence and economies of scale. Such a view suggests that low inflation may persist.
It could also be that, with the aging of the labor force, the natural unemployment rate is lower than expected, so that moderate inflation, even at historically low levels of unemployment, might not be surprising, Kaplan said.
If so, he said, "central bankers need to be vigilant, because it is still possible that inflation figures will strengthen considerably, with a lag in time, if the degree of overcoming full employment becomes more important and persists for a while. " extended period of time. "
Kaplan, who has not voted this year on monetary policy, did not address in his prepared remarks his point of view on whether the Fed should further increase its rates.
(Report by Ann Saphir, edited by Leslie Adler)
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