Fed's Lacker spreading his hawkish cheer. Signs inflation is heating up

Technical Analysis

Author: Greg Michalowski | lacker

Headlines from an event in West Virginia

Fed's Jeffrey Lacker is on the newswires with some further comments. If you recall, yesterday he also spoke and at the time, his hawkish comments helped to support the US dollar. 

In is comments today:
  • Sees signs that inflation might be heating up
  • He and the Fed expects inflation to rise up to 2%
  • Following a policy rule helps maintain confidence
  • Preemptive action helped the Fed establish credibility
  • Asset market prices are relatively high
  • Long-term interest rates have an impact on stock prices
  • Is hard to say if asset prices are too high
  • Be cautious is ignoring policy rule recommendations
  • strong case for raising rates more rapidly
Lacker is a hawk and although he is not a voting member, he is a voice. He seems concerned about the impact of inaction and on the credibility of the Fed.  He already commented yesterday that if he were voting he would have dissented in favor of a hike.  

The dollar impact has been minimal so far although the USDJPY is trading near the high level for the day (up about 10 pips in the last 20 or so minutes). 
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