16 January 2004, 17:00  Fed's Broaddus sees US inflation "under wraps"

RICHMOND, Va., Jan 16 - Richmond Federal Reserve Bank President Alfred Broaddus said on Friday he thought the U.S. economy would outstrip consensus forecasts for 4 percent growth this year and inflation would stay "under wraps." "I think inflation will stay under wraps this year. I'll let you draw your own conclusions about what that may imply for our policy settings," Broaddus told the Richmond, Virginia, chapter of the Risk Management Association. He said financial markets had pushed back their expectations of when Fed policy tightening would start. "Currently, the market appears to expect the initial tightening to occur later, in the second half of the year," he said. While largely upbeat about economic prospects, Broaddus said: "The one definitely disappointing recent report was the job market report for December released last Friday." However, he said other recent data "has been encouraging" and manufacturing was showing "clear evidence" of improvement.//

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