Search ForexCrunch

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…