Plosser Says Fed Must Guard Against Long-Term Inflation

Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank must be ready to contain inflation in the long run as it maintains record monetary stimulus to sustain the recovery.

“With the very accommodative stance of monetary policy that has now been in place for more than three years, we must guard against the medium- and longer-term risks of inflation,” Plosser said in San Diego today. He repeated that the Fed may have to raise interest rates “well before” the end of 2014 “in the absence of some shock that derails the recovery.”