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Dallas Fed’s  Kaplan: 2% inflation is not a ceiling

Dallas Federal Reserve’s Kaplan is crossing the wires and has stated that the key element of the new Fed framework is clarity that the Fed will be less pre-emptive than in the past.

Additionally, Kaplan explained clarifies that the 2% inflation is not a ceiling.

”My own sense of ‘moderate’ inflation is around 2.25% … not 2.5-3.0%,’ Kaplan said.

”My tolerance for an inflation overshoot will be guided by rate of change in inflation and a new framework better describes the FOMC’s reaction function over the last couple of years.

Kaplan stated that how inflation interacts with monetary policy is still evolving.

More to come…

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