U.S. Fed official says not time to change policy stance despite inflation pressures

WASHINGTON, May 17 (Xinhua) -- A senior U.S. Federal Reserve official said on Monday that it's not time for the central bank to change its ultra-loose monetary policy despite inflation pressures.

"We are still 8 million jobs short of where we were pre-pandemic," Raphael Bostic, president of the Federal Reserve Bank of Atlanta, told CNBC in an interview.

"Until we make substantial progress to close that gap, I think we've got to have our policies in a very strongly accommodative situation or stance," Bostic said.

Bostic's remarks came after the Labor Department reported last week that U.S. consumer prices in April rose 4.2 percent from a year ago, the largest 12-month increase since September 2008.

"I actually think that having a healthy level of inflation is a sign that the economy is healthy, the economy is going to be dynamic and growing and that should translate into jobs for the people who everyone is concerned about at the lower end of the wage distribution," he said.

Bostic believed that it will take a couple of months to understand the inflation dynamics as inflationary pressures could ultimately prove temporary.

"I don't think we're going to have clear answers on this at least until early fall, and it may take longer than that. It all depends on how rapidly we recover," he said, backing a continued easy policy stance.

"I'm going to keep my eyes open and I'm definitely going to pay close attention. But now is not the time where we have to consider moving," said the Fed official.

The Fed has pledged to keep its benchmark interest rates unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until the economic recovery makes "substantial further progress."