WASHINGTON –- A group of prominent experts on Federal Reserve policy said in a study that the central bank risks an inflation threat by putting too much emphasis on inflation expectations which they argued could lead to complacency.

[Editor's Note: The government is lying about inflation. Go Here Now.]

The conclusions of the study, said The Wall Street Journal, suggest that the Fed is risking higher inflation over the next few years, which could require "more drastic” increases in interest rates down the road.

The study was written by economists Stephen Cecchetti of Brandeis University; Peter Hooper of Deutsche Bank; Bruce Kasman of J.P. Morgan Chase; Kermit Schoenholtz of Citigroup; and Mark Watson of Princeton University.

According to the study, stated the newspaper, "the theoretical role of inflation expectations has persuaded some Fed officials to "focus intensively” on them as the main driver of inflation itself. Our results suggest that this practice may be misguided.”

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In theory, the newspaper further states, if the public expects inflation to rise, it is more likely to set wages and prices accordingly, and those expectations become self-fulfilling.

The study also disputes the Fed’s view that inflation has become less sensitive to whether the economy is operating above or below its normal capacity and level of employment.

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