Fed vice chairman: Inflation would delay rate hikes

Federal Reserve Vice Chairman Stanley Fischer said Tuesday that a rise in inflation would delay the central bank’s policymakers from raising interest rates.

{mosads}Most Fed watchers expect the central bank to raise rates in mid-2015, though some are concerned that the economy hasn’t fully recovered from the 2008 economic collapse.

“If inflation is really heading south, we will have to [delay raising rates],” Fischer said at a forum in Washington hosted by The Wall Street Journal.

Fed policymakers have kept interest rates at zero, since the financial crisis to free up capital to help spur economic growth but recently ended its purchases of bonds to further stimulate the economy.

If the Fed raises rates too fast, it could spur inflation, some argue. Fischer said the Fed is closely watching data to avoid such a scenario.