U.S. News: Fed Gets Rate Leeway in Latest Data
The Federal Reserve was left on a patient course as it weighs interest-rate increases after a roster of economic reports Friday pointed to steady U.S. job growth and firming -- but still low -- inflation and wages.</br></br>A Commerce Department report showed the Fed's favored measure of inflation -- the personal consumption expenditure price index -- was up 1.6% in June, its 26th straight month below the Fed's 2% inflation goal, though higher than readings at 1% and below last year. Meantime, the Labor Department reported average hourly earnings of private-sector workers were up 2% from a year earlier, unchanged from the range of the past few years.</br></br>That could give Fed Chairwoman Janet Yellen leeway to stick to a plan to keep short-term rates near zero until well into 2015. Still, Ms. Yellen is facing increasing internal pressure from easy-money skeptics on her policy committee to move more quickly toward rate increases.</br></br>In a statement Friday, Philadelphia Federal Reserve Bank President Charles Plosser pointed to current inflation and employment levels to argue that the going Fed schedule for weighing rate increases "remains well behind what I consider to be appropriate given our goals."</br></br>Mr. Plosser dissented at the Fed's policy meeting this past week, wanting a shift away from easy-money policies.