Fed's Fisher sees hints of price pressures despite soft July data

[September 05, 2014]  DALLAS (Reuters) - A top Federal Reserve official said on Thursday he has doubts that inflation has cooled, despite some recent signs of a decline, noting that some economic data has given hints of underlying inflationary pressure.

The Commerce Department's inflation index cooled in July and in annual terms remains below the Fed's 2 percent target, though it has accelerated over much of this year the past year.

The president of the Dallas Federal Reserve Bank, Richard Fisher, said he is not sure the data means "we are experiencing an inflation rate that is less than acceptable," according to remarks prepared for delivery to a business group in Texas.

He noted that his preferred measure of underlying inflation, which strips out the most volatile price movements, showed fast increases in July in some the index's largest, least volatile components.

"The jury is out as to whether we have seen a reversal in the recent upward ascent of prices toward our 2 percent target," Fisher said.

He did not comment on the outlook for monetary policy.

Fisher, known as one of the U.S. central bankers least tolerant of inflation, is a voting member this year on the Fed's policy-setting committee. He will not be a voting member next year, when investors are betting the Fed will begin lifting its benchmark interest rate from current levels near zero.

In an interview with Reuters on Wednesday, Fisher said he thought the U.S. economy would soon be ready for gradual interest rate increases.

(Reporting by Lisa Maria Garza in Dallas and Jason Lange in Washington; Editing by Leslie Adler)

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