WASHINGTON – An unrelenting decline in crude-oil prices suggests it will take longer than expected for headline inflation to return to the U.S. central bank's 2% annual target, said St. Louis Fed President James Bullard on Thursday. When they raised interest rates in December, Fed officials said they are reasonably confident that inflation will return to target over the "medium term," an unspecified time period. "This argument still holds, but it now appears that this process will take longer than previously thought," Bullard said in a speech to the Economic Club of Memphis. Bullard said he is also worried by the recent decline in market-based inflation expectations measures as these are a determinant of actual inflation. Bullard, who strongly favored the December rate hike, is a voting member of the Fed's policy committee this year.
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