September 28, 2017 / 12:07 AM / 5 months ago

Hawkish Rosengren acknowledges low inflation gives Fed flexibility

NEW YORK (Reuters) - A Federal Reserve official who wants “regular and gradual” interest-rate hikes said on Wednesday that low inflation gives the U.S. central bank the option to tighten monetary policy more slowly.

Inflation readings, which have fallen short of a 2-percent target this year, provide “flexibility” to raise rates more slowly, Boston Fed President Eric Rosengren acknowledged at a dinner forum, adding he would be concerned if it misses the target for a period of time.

On the other hand, he said, holding policy steady for too long risks an inflation jump that forces the Fed to more aggressively tighten policy.

Reporting by Jonathan Spicer; Editing by Sandra Maler

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