KANSAS CITY, Mo. - Federal Reserve Governor Wayne Angell said last week that the dollar will strengthen, helping to fight inflation.

Mr. Angell said foreign exchange markets indicate the dollar is undervalued, but he would not say when he expects it to appreciate.

A rising dollar would reduce the cost of U.S. imports and help cut the consumer inflation rate.

"The dollar's appreciation will subtract from inflation rates in the years ahead," Mr. Angell said in a speech to business-people, bankers, and officials of the Federal Reserve Bank of Kansas City.

Doubts on Job Outlook

While he repeated his vow to pursue price stability through monetary policy, Mr. Angell said he was less optimistic about the U.S. unemployment rate than the consensus of private forecasters.

"The U.S. economy is a robust economy, but there will be corrections, and they will be difficult," he said, adding that he sees other concerns abroad.

"I've been quite concerned about low economic growth in Japan," the Fed official said. He added that Europe is in and out of recession.

Domestically, he said, even a 2% annual inflation rate is too high when viewed over 40 years. One-quarter of a percentage point would be better, he said.

Zero-Inflation goal

"I would be happy with that record," he said, but you don't get there without having zero inflation as your goal. My commitment to price stability is about as absolute as you can get."

Mr. Angell said he was pleased at recent consumer and producer price index figures. The producer price index rose a scant 0.1% in August and the consumer price index 0.3%. the federal government reported.

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