Inflation is a concern in the United States and headwinds to economic growth may be picking up, Minneapolis Fed President Gary Stern said in a newspaper interview published on Monday.
AP
Federal Reserve
Stern, a voter on the policy-setting Federal Open Market Committee this year, told the Financial Times that benchmark U.S. interest rates of 2 percent meant the economy was reasonably well-placed to weather weaker growth.
"I don't think the headwinds have diminished ... if anything I think they are picking up a little steam," he was quoted as saying.
"I think we are reasonably well-placed for some disappointments in the next two or three quarters in terms of growth because, in some sense, we have addressed that through policy."
"In my own mind it is little bit more of an open question on inflation."
Inflation expectations were above the Fed funds rate, suggestingreal interest rates were negative, and eventually either expectations would need to decline or rates would have to go up, he said.
"It does concern me. There is no question about it," Stern was quoted as saying about the issue of low real rates at a time of high headline inflation.
"Headline inflation is rapid, too rapid," he said.