Inflation is running below the U.S. central bank's 2% annual target but remains above a level that would spark concerns of "sustained deflation," said Charles Plosser, the president of the Philadelphia Fed, on Wednesday. In a speech prepared for the Charlotte Economics Club, the Fed official noted that several alternative measures of inflation, that attempt to exclude the most volatile price moves in any given month, all tend to suggest that inflation is running between 1.5% and 2.0%. "Given the precision with which we can measure such things, I find this outcome satisfactory," Plosser said. Plosser, a leading hawk on the central bank, wants the Fed to start to hike interest rates sooner rather than later. Other Fed officials, pointing to forecasts of continued low inflation, want the central bank to be more patient. The Philadelphia Fed president is a voting member of the Fed policy committee this year and will retire in 2015.
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