| CHARLESTON, W.V.
CHARLESTON, W.V. Oct 4 Richmond Federal Reserve
President Jeffrey Lacker on Tuesday said there was a strong case
for raising interest rates, arguing that borrowing costs might
need to rise significantly to keep inflation under control.
The Fed last raised its benchmark federal funds rate in
December and Lacker, who is not a voting member of the Fed's
rate-setting committee this year but participates in its
discussions, has been pressing in recent months for further
"Pre-emptive increases in the federal funds rate are likely
to play a critical role in maintaining the stability of
inflation," Lacker said in prepared remarks at a conference on
the economic outlook.
The Fed's current target range for the rate is between 0.25
percent and 0.5 percent and most policymakers expect to raise
the range by a quarter point before the end of 2016.
But Lacker argued economic history suggests the rate should
be about 1.5 percentage point higher than its current level
given the current rates of joblessness and inflation.
"This is the basis for the strong case I have articulated
for raising our interest rate above its current low level," he
(Reporting by Jason Lange; Editing by Chizu Nomiyama)