NEW YORK (CNN/Money) - The rumblings from the Federal Reserve about inflation pressures are increasing and getting stronger. The latest come from the head of the Atlanta Fed, Jack Guynn.
He touched on all the inflation hot buttons in a speech Monday: Talk of price increases by businesses, less idle capacity at factories, higher energy costs, rising import prices, and reports of shortages of skilled workers despite a big pool of unemployed.
Just more proof the Fed is dead set on hiking rates more this year.
The latest reports on the consumer show that early January chain store sales were soggy, maybe because of some harsh weather, and on track for a gain of 3 percent in January. Ho-hum, not ho-ho. And weekly Consumer Comfort sagged a bit.
But the Fed sees a strengthening economy and companies that can at long last boost prices a bit, at least in some sectors, and they ain't going to let that trend build momentum. Even the Fed seems to realize that a key ingredient to higher inflation is accelerating increases in wages. That means the labor market continues to be a major focus, both in the number of jobs created and how much people get paid to do them.
An odd comment from Guynn, though, on a separate but important topic in financial markets. He remarked that he read a media report about the Fed keeping its pledge to move slowly on rates, at a measured pace.
"Guess what? I don't think the Fed ever made such a pledge, and I think it's unfortunate that our effort to offer some insight into our policy inclination is sometimes misconstrued."
Misconstrued?
When every Fed statement for months had those words? Maybe Mr. Guynn is trying to pave the way for faster rate hikes if his inflation fears come true. But to say the media "misconstrued" seems as off base as anything the Fed has said for awhile.
Kathleen Hays is economics correspondent for CNN and contributes to Lou Dobbs Tonight.
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