During an interview with Bloomberg TV on Wednesday, Federal Reserve’s Vice Chairman Richard Clarida said that he is not even going to think about a rate hike until actual inflation reaches 2%, as reported by Reuters.
“The current state of the world puts a downward bias on inflation and an upward bias on unemployment,” Clarida noted and explained that judgement on any overshoot of inflation will be made closer to the time. “The US needs to spend some time with inflation above 2% to offset the time spent below it.”
Clarida further argued that a pretty impressive return of low unemployment and inflation at the target could be seen within three years.
Market reaction
The US Dollar Index showed no significant reaction to these comments and was last seen gaining 0.14% on the day at 94.10.
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