The recent spike in crude oil prices will be evident in headline inflation gauges but will have a "very limited effect on core" ones, former Fed vice chairman Don Kohn told CNBC Friday.
"The question is how far that goes," said Kohn, "and more importantly whether that gets built into inflationary expectations."
He added only some of the energy-price increases would be passed on by companies, citing airlines as an example.
Kohn, in a prerecorded interview on the network's"Closing Bell"program, made his comments as financial markets stabilized Friday, despite continuing uncertainty about oil prices amid Middle East unrest.
He essentially rejected recent market concerns that the Fed's QE2 policy had stirred the broad rally in commodities, saying central bank policies—from Europe to the US—have not had "a major effect." He added that growing demand in emerging market economies was more of a factor.
Kohn, who left the central bank in June of last year and has since joined the Brookings Institution, played a key role in the Bernanke Fed, often echoing Bernanke's positions to the market as part of a one-two policy punch. Kohn's comments often underscored Bernanke's.
Kohn, for example, in a seminal May 2010 speech, made it clear that the Fed's first round of quantitative easing—involving some $1.5 trillion in securities purchase—was meant to shore up the struggling housing market through extremely low mortgage rates.
Watch the whole Kohn interview on "The Kudlow Report" at 7 pm ET.
Second-guessing of Fed policy—especially the latest round of quantitative easing--has increased dramatically since Kohn's departure, with some FOMC members clearly concerned about an inflationary spike.
One skeptic, Richmond Fed President Jeffrey Lacker told CNBC earlier Friday: "At this point in the business cycle we need to withdraw monetary policy stimulus at some point in order to prevent inflation from rising...."
Still, Kohn said it is "critical central banks keep a careful eye on inflation expectations."