Fed Governor Waller Downplays "Energy Inflation" Threat, Fed Firmly Focuses on Core Indicators

Odaily News Fed Governor Waller stated that he does not believe the war in Iran will have a lasting impact on inflation. He noted that while consumers may experience "sticker shock" due to rising gasoline prices, policymakers will look through any one-time price increases. In an interview on Friday, Waller said, "For us considering future policy, this is unlikely to lead to sustained inflation. This is also one of the reasons we don't focus on energy prices. When we look at core indicators, they are better predictors of future inflation." He was referring to inflation measures that exclude volatile energy and food prices. Fed policymakers are expected to keep interest rates unchanged for the second consecutive time when they meet on March 17-18. Given that the labor market is stabilizing and inflation remains above the 2% target, officials have signaled they can be patient in considering further rate cuts. (Jin10)