Infrastructure Capital Advisors CEO Jay Hatfield urged the Federal Reserve to give underlying inflation more weight when oil pushes up overall prices, citing the effect interest rates can have on housing.
In a Friday, Oct. 30, interview on Excess Returns, Hatfield argued against raising rates in response to inflation driven by oil. He pointed to housing as an area where Fed policy can have a pronounced effect and urged policymakers to account for that sensitivity in their decisions.
Hatfield also called for an overhaul of the Fed’s forecasting models and questioned the basis for its 2% inflation target.
The Federal Reserve’s longer-run inflation goal is based on the annual change in the Personal Consumption Expenditures (PCE) price index. The Bureau of Economic Analysis (BEA) said September’s PCE price index rose 3.6% from a year earlier. The core measure, which excludes food and energy, rose 3.1% over the same period.
The Bureau of Labor Statistics is scheduled to release the October consumer price index report at 8:30 a.m. ET on Tuesday, Nov. 10.
