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Price stability must be Fed's main concern, two policymakers say
May 30, 2014 / 11:32 PM / 4 years ago

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

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.

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. REUTERS/Danny Moloshok

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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