“The most important contribution monetary policy can make to growth and rising standards of living is to achieve and maintain price stability,” Minneapolis Fed President Gary Stern told the American Academy in Berlin in a speech that advocated the adoption of specific inflation targets.

Stern told reporters the Fed is in a better position to keep inflation low after its string of 15 interest rate hikes, but did not address prospects for future policy.

The core personal consumption expenditures (PCE) index, the Fed’s favorite inflation measure, has kicked up a bit in the past couple of years, but the “broad sweep” of the past seven or eight years has been a picture of low inflation, he said.

The federal funds rate is 4.75 percent, some 375 basis points above its level in June 2004, when the Fed’s tightening program began. Financial markets expect a further increase in May and are split on whether another will follow in June.

Dallas Fed President Richard Fisher said the Fed would do what it takes to ensure inflation won’t “raise its ugly head.”

“With what I expect to be the future thoughtfulness of monetary policy going forward, we will continue to be able to contain inflation and provide the conditions for continued growth,” Fisher told a Dallas Friday Group luncheon.

Answering audience questions, he said the U.S. dollar is a “faith-based currency” that is dependent on the credibility of the central bank.

“In addition to a faith-based currency, we are the currency of the world and we must maintain its integrity. As far as my involvement is concerned, I will spend every ounce of energy doing that. I have no doubt that my colleagues will do exactly the same,” he said.

Fisher, who since taking the Dallas Fed’s helm last year has focused its research efforts on the economic impact of globalization, said the increasingly global economy has helped cut U.S. inflation and improved public policy.