Higher oil prices-hovering above $40 a barrel recently-will not have the tragic effect on the U.S. economy as similar prices have had in the past, according to Robert McTeer. McTeer is president and chief executive of the Federal Reserve Bank of Dallas and a member of the Federal Open Market Committee (FOMC), which sets the federal funds and discount rates. "People have lost track of things," McTeer told members of the Houston World Affairs Council at a recent program. Oil prices' influence on the U.S. economy has been cut in half since 1980. A barrel of oil that cost $40 in 1980 is equivalent to $75 or $80 today. "[A price of] $41 is not as draconian as it used to be and movements up are not as harmful as they used to be." He added that higher oil prices are the result of growing demand. The U.S. economy itself has improved greatly in the past few months, and so have those abroad. "It's a strong economy around the world that is doing this." The federal funds rate was 1% at press time. McTeer said recent U.S. economic and job growth does not necessarily mean the FOMC will react with a bump up in that rate in its next few meetings. Instead, a bump up will only be in response to signs of undesirable doses of inflation.