Fed Officials Warns Against Complacency

Warning against complacency toward inflation, Atlanta’s Federal Reserve chief said Monday that monetary policymakers should debate whether the current rate of around 3 percent is too high.

But Jack Guynn wouldn’t say if he supports raising interest rates to slow the economy and cool off inflationary pressures.

“Now that we’ve achieved a steady inflation rate of around 3 percent or less for some five years, the next question becomes, ‘Would an even lower rate of inflation optimize economic performance?”’ the president of the Federal Reserve Bank of Atlanta told a civic club audience.

Guynn’s opinions may carry more weight this year on the Fed’s Federal Open Market Committee, which debates and sets monetary policy, because he’s one of five regional presidents who get to vote in 1997.

In his remarks Monday, Guynn predicted the economy should continue its slow, steady expansion in 1997 though “perhaps a tad slower than last year.”

He also predicted inflation should hover at about 3 percent.