Fed’s Kashkari says rise in inflation will trigger rate hike

MINNEAPOLIS The Federal Reserve should raise U.S. interest rates before inflation reaches the Fed’s 2-percent goal, given the lags with which monetary policy affect the economy, a top U.S. central banker said on Monday.”It’s not so much, do we let it go above 2 percent and then keep accommodative policy and not respond to that,” Minneapolis Fed President Neel Kashkari told reporters after a speech at the Economic Club of Minnesota. “If we see it start moving towards 2 percent and we have confidence that the data is real, I would then expect to see less accommodative policy, just because people are afraid of how big the overshoot is going to be.”

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)


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