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

Odaily News Fed Governor Waller stated that he does not believe the Iran conflict will have a lasting impact on inflation. He pointed out that while 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, core indicators are better at predicting future inflation." He was referring to the inflation measure that excludes 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 that they can be patient when considering further rate cuts. (Jin10)