(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday that U.S. inflation rising a bit above the central bank’s target for several years should not be concerning given recent shortfalls.
“We officially have a symmetric target and actual inflation has averaged around 1.7%, below our 2% target, for the past several years,” Kashkari said in response to questions on Twitter. “So if we were at 2.3% for several years that shouldn’t be concerning.”
The Fed is about to review how it reaches its 2% inflation target and prevents future economic downturns.
Policymakers will entertain ideas such as welcoming temporary price gains above the official target. Kashkari said he was “keeping an open mind” about the best approach going forward.
In the meantime, Kashkari said he still favors caution on rate hikes because the U.S. economy is not yet at maximum sustainable employment levels and also because of the tame inflation. Wages still have room to grow, he said.
Reporting by Trevor Hunnicutt; editing by Diane Craft