The Federal Reserve is unlikely to raise interest rates sharply this year as there is little risk of inflation despite robust economic growth in the United States, a leading American economist said on Wednesday.
Fred Bergsten, director of the Institute for International Economics, told a news conference in Tokyo that there were some signs of a modest rise in inflation, but he did not think it would prompt the Federal Reserve to move "any time soon".
"So unless there is some totally unanticipated onset of inflation pressure, I don't see the Federal Reserve moving very much at all...and I'm still not sure it will move at all this year," he said.
Bergsten, who served as the US Treasury's assistant secretary for international affairs in 1977-81, added that the central bank was likely to be "quite comfortable" in seeing inflation rise to about two percent.
He said he expected the US economy to grow five percent this year and probably by four percent or more next year.
He said such high growth meant US interest rates would rise eventually, but that rates remained low for now because inflation had been kept in check by rapid productivity growth.
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