by Calculated Risk on 5/22/2006 05:17:00 PM

From Reuters: Fed's Fisher says inflation running too high

Dallas Federal Reserve Bank President Richard Fisher on Monday said U.S. inflation was running too high for comfort ...

"I think we must continue to be wary of the onset of inflation and the onset of inflation expectations," Fisher told reporters ... "I am guided by what we call the trimmed mean PCE (calculated by the Dallas Fed) ... I personally believe it is a better measure. It is time-tested. ... The trimmed-mean PCE ... gives rise to some discomfort on my part, but we shall see what ensues."

The Dallas Fed's last release showed its trimmed mean PCE inflation measure rising by 2.3 percent over the 12 months to March. April's data will be released on Friday.

Here is the Trimmed-Mean PCE Inflation Rate from the Dallas Fed.

And on housing:

Fisher ... said that while the U.S. housing market appeared to be moderating, there was still a lot of strength in the economy.

"(Housing) is clearly cooling ... there are other offsets -- there is a very big expansion in capex and business expenditure ... the real issue is what will be the impact on consumption," he said.

Here is Fisher's speech: Globalization's Impact on U.S. Growth and Inflation