Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, gave a speech today on his view of the economic outlook for 2012. Unlike several of his fellow Fed presidents who have weighed in with ideas for getting the mortgage market moving again, Lacker says “a highly cautious attitude toward mortgage debt makes abundant sense” in today’s market.
Lacker, usually identified as an inflation hawk, is also concerned that the Fed is not paying enough attention to inflation. He notes that inflation averaged 2.5% through November of 2011, although he expects it to drop below 2% in 2012. Other Fed presidents have not expressed similar worry about inflation.
Lacker also referred to a “mismatch” of skills between what kinds of jobs are available and the unemployed who are available to fill those jobs. This so-called “structural” unemployment problem could account for as much as 1.4% of the current US unemployment rate.