PHOENIX, Nov 29 (Reuters) - The Federal Reserve should be okay with allowing U.S. inflation to run at 2.7 percent for five years, and should not raise interest rates until inflation at least reaches its 2-percent goal, Minneapolis Fed President Neel Kashkari said on Wednesday.
“2% core PCE on a 12-month basis would be a good place to start,” Kashkari said in a wide-ranging chat on Twitter, in response to a question about what level of inflation he would like to see before tapping the brakes on the economy. The core personal consumption expenditures index, or PCE, is the Fed’s preferred gauge of inflation.
“We’ve been 1.3% for 5+ years so we should be comfortable at 2.7% for 5+ years. That’s what we are saying when we call it a target and not a ceiling.”
Kashkari has dissented at each Fed rate increase this year, and has signaled he may dissent again if the Fed raises rates at the next meeting in December. (Reporting by Ann Saphir; Editing by Chizu Nomiyama)