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(CEP News) - Speaking at a panel discussion in Washington D.C., Atlanta Fed President Dennis Lockhart (non-voter) said inflation was at uncomfortable levels and that policy would need to react decisively to counter it if it began to affect wages.
"The current circumstances seem to me to be best described as an intersection of three serious and interacting challenges - weakness in the general economy, uncomfortable levels of inflation, and continuing threats to financial stability," said Lockhart in his opening remarks. "Economic weakness is demonstrated in growth rates well below potential and deteriorating unemployment measures." Although he promised that he was taking price developments seriously, Lockhart said wages have not yet been affected by inflation. He said the first half of 2009 should see 1% to 2% growth in GDP with little pick up in the second half. Lockhart also said that some of the "turmoil and dysfunction in financial markets" had receded but not completely ended. By Erik Kevin Franco,
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, edited by Stephen Huebl,
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