Kohn: Nomination as Vice Chairman to the Board
"Price stability is important and I have found the recent inflation data somewhat troubling," Kohn told the Senate Banking Committee at a hearing on his nomination to be the Fed's vice chairman.
"They are backward-looking ... but they were higher than I had anticipated and that raises a warning flag that something might be in train," he said.
"In addition, some measures of inflation expectations over the longer run have crept up just a little: Surveys of households, financial market expectations of inflation -- It's not a big move, but it is (an) upward move," he said.
"I think people are reacting to some extent to the energy price situation. The economy is facing a somewhat more difficult situation right now, because of the rise in energy prices, which has both tended to raise inflation and also tended to damp activity going forward," he said.
Testimony of Federal Reserve governor Donald L. Kohn before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, June 8, 2006.
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