The Federal Reserve needs to move more quickly with raising interest rates, a top Fed official said on Friday, as low inflation readings fail to justify keeping rates near zero.
Lower oil prices and job market data that are exceeding Fed forecasts are helping to propel the U.S. economy, said St. Louis Fed Bank President James Bullard.
Inflation moving away from the central bank’s target is a concern that should be monitored, Bullard said, but these figures have rebounded since mid-October.
“While a low inflation rate may suggest a somewhat lower-than-normal policy rate, that effect is not large enough to justify remaining at the zero lower bound,” Bullard said in prepared remarks here at an economic forum.
Bullard, a policy hawk who has long advocated for the Fed to lift rates in the first quarter of next year, said concerns about Europe’s weakening economy were overstated, in part because “U.S. macroeconomic fundamentals seem strong.”