Fed key rate closer to ‘neutral,’ should be patient on inflation: Kaplan

on Aug12

Robert Kaplan, president of the U.S. Federal Reserve Bank of Dallas.

Daniel Acker | Bloomberg | Getty Images

Robert Kaplan, president of the U.S. Federal Reserve Bank of Dallas.

The Federal Reserve’s key interest rate is getting close to a “neutral” level so the Fed should patiently wait for further evidence that inflation will rise before tightening policy again, Dallas Fed President Rob Kaplan said on Friday.

“I want to now see more evidence that we are making progress in reaching our inflation objective,” he told a University of Texas at Arlington audience, saying the so-called neutral rate is likely closer to 2 percent than to 3 percent. The Fed has raised its key rate to a range of 1 to 1.25 percent.



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