NEW YORK (Reuters) - The declining dollar and strengthening labor market should boost monthly U.S. inflation readings, even while it takes longer for the annual measures preferred by the Federal Reserve to rebound from “very weak” recent levels, New York Fed President William Dudley said on Thursday.
The declining dollar, which pushes up import prices, and the tightening labor market, which raises wages, “should combine to eventually push (sequential) inflation up,” Dudley told reporters. “We’ve had these very weak inflation readings for a number of months in a row” and that won’t “drop out” of annual readings for six to 10 months, he added. “It will take some time.”
Reporting by Jonathan Spicer; Editing by Chizu Nomiyama