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Fed's Lacker sees rate rise before late 2014

Fed's Lacker sees rate rise before late 2014 (by William L. Watts)

FRANKFURT (MarketWatch) -- Richmond Federal Reserve Bank President Jeffrey Lacker on Friday said he dissented from the Federal Reserve's announcement earlier this week that it intends to keep interest rates near zero until late 2014 because he expects economic activity to prompt an earlier rate rise. "I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for so long," Lacker said in a statement posted on the Richmond Fed website. "I expect that as economic expansion continues, even if only at a moderate pace, the federal funds rate will need to rise in order to prevent the emergence of inflationary pressures. This increase in interest rates is likely to be necessary before late 2014," he said. Lacker was the only member of the Federal Open Market Committee to vote against the Fed policy action, citing a desire to omit the reference to the time period.