10/21, 4:11 PM (Source: TeleTrader)
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Waller: Inflation is Fed's biggest upside risk

Chris Waller, a member of the Federal Reserve Board of Governors, stated on Thursday that inflation is currently the central bank's biggest upside risk and the next five months will be critical in determining whether inflation is transitory.

Waller noted that in the long run the inflation expectations remain anchored, but if price pressures stay too high the Fed may have to act fast. He also added that with inflation being up the Fed is in a "tricky spot" and it won't be able to focus only on the employment market when introducing policy changes.

Overall the Fed official said he does not see any credit "bubbles" in the near future as the balance sheet is in a "relatively good shape". Waller also doesn't expect big market shocks when the central bank introduces tapering to the bond-buying program.

Breaking the News / LH