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Fed key rate closer to 'neutral,' should be patient on inflation: Kaplan
August 11, 2017 / 3:07 PM / a month ago

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

FILE PHOTO: The corner stone of the New York Federal Reserve Bank is seen surrounded by financial institutions in New York City, New York, U.S., March 25, 2015. REUTERS/Brendan McDermid/File Photo

ARLINGTON, TX (Reuters) - 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.

Reporting by Lisa Maria Garza; Editing by Bernadette Baum

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