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Jeffrey M. Lacker

March 16, 2012

Richmond Fed President Lacker Comments on FOMC Dissent

Richmond, Va.

"The Federal Open Market Committee released a statement following its March 13, 2012, meeting stating that the Committee currently anticipates that economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for this length of time. The economy is expanding at a moderate pace, and inflation is close to the Committee's 2 percent objective. As the expansion continues, the federal funds rate will need to rise in order to prevent the emergence of inflationary pressures. The forward guidance is intended to represent our best forecast of the appropriate timing of changes in the Federal Funds rate, and my current assessment is that an increase in interest rates is likely to be necessary some time in 2013.

"My views on the economy and monetary policy are also available on Richmondfed.org."


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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