May 30, 2014 / 11:32 PM / 3 years ago

Price stability must be Fed's main concern, two policymakers say

John Williams, president and chief executive of the Federal Reserve Bank of San Francisco, takes part in a panel discussion titled "U.S. Overview: Is the Recovery Sustainable" at the Milken Institute Global Conference in Beverly Hills, California May 1, 2012.Danny Moloshok

PALO ALTO Calif. (Reuters) - The Federal Reserve should not use interest-rate policy to head off risks to financial stability if doing so would unmoor inflation expectations, two Fed officials said on Friday.

The two -- San Francisco Fed President John Williams and Jeffrey Lacker of the Richmond Fed -- disagreed on many aspects of policy during a nearly hour-long question-and-answer session with the press after a conference here, but on this view they were uncharacteristically united.

Charles Plosser of the Philadelphia Fed offered a slightly more cautious view of the interplay between monetary policy and financial stability, noting that he worries that monetary policy itself may become a source of financial instability.

Reporting by Ann Saphir; Editing by Leslie Adler

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