While the latest indicators regarding inflation in the USA gave signs of relaxation, an important name of the Fed made an inflation comment.
Fed Board Member Christopher Waller pointed out that the PCE deflator data released on Friday supports the arguments that inflation can be lowered in the US without harming the labor market.
Speaking at an academic meeting organized by the San Francisco Fed, Waller stated that if US consumers begin to believe that prices continue to rise, the Fed should make dramatic moves in the face of these expectations in order to beat inflation.
On the other hand, he also underlined the model that inflation can be reduced with some relatively negative effects in terms of high unemployment if the high prices are caused by the increase that occurs frequently in the re-determination of prices by companies.
Stating that the latest data point to this model, Waller said that more data is needed on which of the two models he mentioned will be valid.