MNI BRIEF: Fed Is Focused On Inflation Expectations - Musalem

The Federal Reserve is focused on making sure inflation comes back to the 2% target and that inflation expectations stay anchored, St. Louis Fed President Alberto Musalem said Friday. 

"Expectations of inflation are rising for businesses and for consumers," Musalem said at an event at the Heartland Health Institute in Bentonville, Arkansas. "There is also a higher expectation of higher prices going forward for inputs and for outputs. I'm watching that very carefully for consumers and for businesses, because we at the Fed don't want short term inflation expectations to rise to such a level that they could see seep into long term inflation expectations, which would make our job harder in terms of achieving maximum employment and price stability."

"We're focused on not allowing that to happen," he added. "Right now, our GDP level is very close to its potential level. Right now our labor market is very close or at or around full employment." (See: MNI INTERVIEW: Fed Could Hold Rates For Some Time-Kaplan)