Fed won't take risks with inflation: Fed's Guynn
By Alister Bull
DULUTH, Georgia (Reuters) - Core inflation may have already breached its acceptable upper level and the Federal Reserve must be ready to reset policy if the outlook has indeed worsened, one of its top policy-makers said on Wednesday.
"Core inflation, which excludes volatile food and energy costs, has moved into the upper end of -- or beyond -- the range I consider acceptable over time," Federal Reserve Bank of Atlanta President Jack Guynn said in a speech. Guynn is a voter this year on the policy-setting Federal Open Market Committee.
"If we're on target with our present forecast for growth to moderate to a sustainable pace and for inflation to fall back within acceptable bounds, I would say that monetary policy is now close to where it should be," he told the Council for Quality Growth in Duluth, a suburb north of Atlanta.
"But, as I have already suggested, the FOMC's job is to continue to update that outlook as we get new data and anecdotal information. So we have to remain open to rethinking our policy setting as that outlook changes," he said.
Investors now see a greater chance of another interest rate hike by the Fed at its next meeting following a rash of hawkish comments on inflation from policy-makers. The U.S. central bank has raised rates in 16 consecutive quarter-percentage-point steps to 5 percent. Its next meeting is on June 28-29.
Guynn said there were some factors that could help to slow the pace of price rises, citing U.S. productivity and strong global competition.
"Still, I view current inflation risks to be elevated for three reasons," he said.
There may still be pass-through pressures in the pipeline from energy prices, he said. In addition, some components of core inflation "such as services have been moving at rates that warrant continued concern" and inflation expectations have "recently edged upward," he said.
Army officer says won't fight in "unlawful" Iraq warBy Akiko Fujita
TACOMA, Washington (Reuters) - A U.S. Army officer said on Wednesday that fighting in the war in Iraq would make him "party to war crimes" and he would not go.
First Lt. Ehren Watada's supporters -- including clergy and a military family group -- said he is the first commissioned officer to publicly refuse to serve in Iraq and risked being court-martialed.
The Pentagon said Watada was among a number of officers and enlisted personnel who have applied for conscientious objector status.
"The wholesale slaughter and mistreatment of the Iraqi people is not only a terrible moral injustice but a contradiction of the Army's own law of land warfare. My participation would make me party to war crimes," said Watada in a taped statement played at a Tacoma news conference.
His superiors at the nearby Fort Lewis military base would not let Watada leave the base to attend the press conference. Another news conference took place in Watada's native Hawaii.
Watada, 28, had been scheduled to be deployed to Iraq for his first tour later this month. He joined the Army in 2003, and has served in Korea.
Watada said his moral and legal obligations were to the U.S. Constitution "not those who would issue unlawful orders."
Nearly 2,500 U.S. soldiers and an estimated 40,000 Iraqi civilians have been killed since the U.S.-led invasion of Iraq in March 2003.