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Inflation has been unusually sluggish since the 2007-2009
recession.
The Fed has kept interest rates low in part to foster faster
price gains and said last week it was likely to raise interest
rates more slowly than policymakers had expected in December.
"The recent data on inflation - because they have come in firmer
than expected - suggests that upside risks to inflation have
increased maybe not significantly, but I think noticeably and
materially," Lacker said at a central banking conference at the
Bank of France in Paris.
"We need to take that into consideration," he said, adding that
he expected core inflation firmer this year than last year and
close to 2 percent in 2017.
The U.S. central bank said in its Wednesday policy statement
that financial market-based measures of expected inflation were
low.
"Although recent declines in inflation compensation do give me
some pause, I think the evidence indicates that inflation
expectations ... remain well-anchored," Lacker said. He cited
studies that suggest public expectations of inflation guide
actual price changes.
Lacker, known as a hardliner on the Fed's duty to keep inflation
from running much above 2 percent, said U.S. inflation was bound
to increase significantly after the price of oil bottoms out.
Lacker is not a voting member on the Fed's rate-setting
committee this year but participates in its discussions.
(Reporting by Leigh Thomas in Paris; Additional reporting by
Jason Lange in Washington; Editing by Richard Chang)
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