WASHINGTON (Reuters) – Federal Reserve vice chair Richard Clarida said Wednesday that policymakers “are not even going to begin thinking” about raising interest rates until inflation hits 2%, comments aiming to help cement the public’s understanding of the central bank’s new approach to monetary policy.
“Rates will be at the current level, which is basically zero, until actual observed PCE inflation has reached 2%,” Clarida said on Bloomberg, referring to the Fed’s preferred measure of prices.
“That’s ‘at least.’ We could actually keep rates at this level beyond that. But we are not even going to begin thinking about lifting off, we expect, until we actually get observed inlation … equal to 2%. Also we want our labor market indicators to be consistent with maximum employment … So that is the whites of their eyes.”
(Reporting by Howard Schneider; Editing by Andrew Heavens)
