In an exclusive interview on CNBC, Richmond Federal Reserve President Jeffrey Lacker said he thinks economic growth will rebound by the end of the year but that inflation is still too high.
“Business investments hit a soft spot in the fourth quarter, but all signs are that the fundamentals are good and it is going to be a source of strength going forward," Lacker told CNBC's Steve Liesman. "Consumer spending is in good shape as well, so I am expecting a return to trend growth by the end of the year.”
However, Lacker, one of the Fed's toughest inflation hawks, said he'd like to see the inflation rate come down a bit more. Although he is not a voting member of the Fed this year, Lacker dissented four times last year from the majority at the Fed who wanted to keep interest rates unchanged instead of raising them.
“I don’t think the moderation we’ve seen is statistically significant,” he said. “The core inflation has been fluctuating between 2% and 2.5% for two years now and before that from 1996 through 2003, core inflation was between 1% and 2%. We need to get back to containing core inflation between 1% and 2%.”