Our objective is to keep inflation under control, so keep it averaging 2 percent, Lacker said today in an interview with Kathleen Hays on Bloomberg Radio. So to my mind, that doesnt mean it has to cross two before the Fed raises rates
It wouldnt surprise me to see softer inflation for a couple of months, but I think if you look a year out, I think well be at 1.5 or higher, Lacker said
Inflation is, I think, a key swing variable in the outlook for when the Fed will raise its benchmark policy rate from zero, where it has been since 2008, Lacker said.
The unemployment rate has continued to decline, and so I think thats dramatically reduced the extent to which we ought to be sort of unhappy about labor market conditions and our employment mandate, he said. On the other hand, inflation has run below two for quite some time now, and the longer that goes on, the more you ought to focus on inflation.