Fed Governor Waller downplays "energy inflation" threat, Fed firmly focuses on core indicators

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