The FED Lanker: rates may increase until the end of the year

The Federal Reserve destination could raise interest rates by the end of the year to keep inflation, Federal Reserve Bank of Richmond President Jeffrey Lanker said Thursday.

Speaking to journalists here, said inflation risks Lanker during the last six months have been picked up, "after" rose "significantly."

"I think we're OK now, but I think the upside is higher now than six months ago," he added. "The danger now is that we exceeded ".

The Fed dropped interest rate short-term goal in almost zero in December 2008 during the economic crisis, and reiterated that it will follow for "an extended period."

However, several regional Fed Presidents over the past few weeks have discussed options for tightening monetary policy amid signs of stronger economic growth and potentially worrying signs of inflation.

US consumer prices in February rose by its fastest from mid-2009 as it has energy and food prices. Core inflation, which excludes volatile food and energy components and monitored closely by the Fed, was more subdued.

The US Central Bank buys $ 600 billion of Treasurys in an attempt to maintain low interest rates and stimulate the economy. The program started last year and is scheduled to run through June.

Lancker, an inflation hawk who opposed the plan-bond markets, has said repeatedly that the Fed should review at each meeting of the Federal open market Committee. He is currently a member of the FOMC vote.

He also said that the EDF should sell the entire portfolio of mortgage-backed securities "as soon as possible" because it does not believe the Central Bank will have to own any securities other than Treasurys.

The Fed holds more than 1 trillion dollars of mortgage-backed bonds purchased as part of a separate-bond effort to support the housing market.

"Financing the housing market can easily withstand a substantial award of our MBS holdings," he said. "I think that we should not fear the housing market spaces.

"Slightly higher mortgage spreads are not going to make a material difference to the prospects of the housing," he added.

Asked about the decision of the the European Central Bankto raise interest rates a quarter percentage point to 1.25%, Lanker said Thursday the ECB was a pioneer for the Fed's policy making. He said that the Fed will concentrate exclusively on domestic inflation and the overall outlook.

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