1:56 PM ET 6/14/06 FISHER SAYS HIS FAVORITE INFLATION GAUGE UNACCEPTEDLY HIGH
1:54 PM ET 6/14/06 FED'S FISHER: HIGH INFLATION EXPECTATIONS HURT GROWTH
1:55 PM ET 6/14/06 FISHER SAYS BEGINNING TO SEE U.S. ECONOMIC SLOWDOWN
http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-06-14T175145Z_01_N14322770_RTRIDST_0_ECONOMY-FED-FISHER-UPDATE-1.XMLCORPUS CHRISTI, Texas, June 14 (Reuters) - Some measures of inflation show it running at levels that cause discomfort and are unacceptable, Federal Reserve Bank of Dallas President Richard Fisher said on Wednesday.
"We can ill afford to somehow encourage expectations that inflation might gain momentum. For in today's monetary realm, with markets so fluid and swift, expectations can quickly become reality," he told a community luncheon hosted by the San Antonio branch of the Dallas Fed.
Fisher noted that the Dallas Fed's own trimmed measure of inflation -- which excludes the most volatile components of the price index every month to plot the underlying trend -- had been running at 2.4 percent year-on-year. He also said that household surveys found that people expected prices to rise faster in the future.
"To me, this is more than discomforting. It is unacceptable. To perform the duty you expect of me, I need to be relentlessly bird-dogging inflation to prevent a debasement of your dollars," said Fisher, who is not a voting member of the Fed's interest-rate setting committee this year.
Data out earlier on Wednesday showed consumer inflation running at a faster-than-expected pace of 0.4 percent in May, pushed up by a steep increase in energy, while core inflation, which strips out energy and food prices, advanced 0.3 percent in the month and stands 2.4 percent higher year-on-year.
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