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Fed's Poole - U.S. inflation not too low
Fri February 20, 2004 11:42 AM ET
ST LOUIS, Feb 20 (Reuters) - Federal Reserve Bank of St Louis President William Poole said on Friday that prevailing U.S. inflation rates were not too low, and he saw more risks of a surprise on the upside than the downside.
"Right now, over the next year, the probability for a half point upside surprise is greater than a half point downside surprise," he told reporters following a speech here.
Citing prolonged higher energy prices, he said this may mean that low core inflation rates were stripping out too much of what was impacting price pressures in the economy.
But he said this did not mean that the probability of an upside surprise was large.
"I'm certainly not uncomfortable with inflation at today's level. I don't think inflation is too low. Not all my colleagues agree with that. I thought the odds of deflation were always minor and I think that the odds today are even lower," he said.
Poole was not referring to Friday's CPI report, which showed consumer prices last month rising at the fastest pace in nearly a year, and declined to comment directly on the numbers.