Tuesday, July 22, 2008

Philadelphia Fed President: Raise Rates

To fend off inflation, the Federal Reserve probably will need to boost interest rates "sooner rather than later" even if employment and financial conditions haven't revived, the president of the Federal Reserve Bank of Philadelphia said Tuesday.

Charles Plosser is a voting member of the Federal Open Market Committee, the group including Fed Chairman Ben Bernanke that determines the direction interest rates should go to influence national economic activity...

Possessing a reputation for being extra-vigilant about inflation dangers, Plosser was one of two members who dissented from the Fed's decision in late April to slice its key rate. That turned out to be the Fed's last rate reduction, in one of its most aggressive campaigns that started last September.

"Inflation is already too high and inconsistent with our goal of - and responsibility to ensure - price stability," Plosser said in a speech to a group assembled by the Philadelphia Business Journal.

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