Fed official: Inflation spike must be fought quickly

04/1/2009 | Reuters

The Federal Reserve must be ready to raise interest rates to blunt a likely inflation spike as the U.S. economy returns to growth, even if unemployment is still increasing, said Charles Plosser, president of the Federal Reserve Bank of Philadelphia. Plosser is a known inflation hawk on the Fed's board. Because unemployment is a lagging indicator of what is going on in the economy, he said, the economy will turn around before joblessness falls.

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