Concerns that Federal Reserve Chair Janet Yellen is ignoring the threat of inflation, like Ben Bernanke did with the subprime mortgage market, are probably exaggerated, former Federal Reserve Bank of Minneapolis President Gary Stern said Tuesday.
"Fundamental underlying inflation doesn't look to me like it's getting ready to accelerate by any appreciable amount right now," Stern said in an interview with CNBC's "Closing Bell."
"There's a lot of inertia in the inflation market. So when inflation is low it tends to stay low."
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The Consumer Price Index jumped 0.4 percent in May, causing some to question whether the Fed can wait until mid-2015 to raise interest rates. The index, which is the market's most widely followed inflation measure, is trending at a 2.1 percent annualized rate.
The Fed uses the Personal Consumption Expenditures, which is expected to measure about 1.6 percent in May, well above the 0.9 percent in April.