FED PRESIDENT LACKER: Inflation Has Bottomed

"While the inflation numbers will often run hot or cold for several months at a time, the latest numbers suggest that inflation has bottomed out and is moving toward the Committee's target," said Jeffrey Lacker. "I expect that firming trend to continue this year."

Lacker, President of the Richmond Federal Reserve, said this as he presented his economic outlook in Charlotte, North Carolina.

Inflation rates have been low for a long time. But CPI and PCE reports have indicated that prices have been picking up.

It's worth noting that Lacker is not presently a voting member of the Federal Open Market Committee, which decides the path of monetary policy.

"The outlook for inflation is ... quite important to us, since ... monetary stability has always been the Fed's primary mission," said Lacker. "The Federal Open Market Committee is on record as stating that its goal is for the price index for personal consumption expenditures to rise at an annual rate of 2 percent. Many observers expressed concern last year that inflation, at about 1 1/4 percent, was running well below the FOMC's target. Inflation has averaged 2 1/2 percent over the last three months, however. "

More to come...