The Federal Reserve should keep its benchmark interest rate at current levels until there is an upswing in inflation, St. Louis Fed President James Bullard said on Tuesday.
"Inflation data during 2017 have surprised to the downside and call into question the idea that U.S. inflation is reliably returning toward target," Bullard said in a speech during an appearance in Louisville, Kentucky.
He added that even if the Fed does manage to return inflation to its 2 percent inflation target, it would not happen before 2018 or 2019.
The U.S. central bank has raised interest rates twice this year and appears on course for another upward move in December despite persistently weak inflation.
Bullard has repeatedly said raising interest rates again in such an environment risks harming the economy.
"The main concern I would have is that we raise rates in December and inflation expectations fall... which would in my view be a vote of no confidence from markets," Bullard told reporters.
The Fed's preferred gauge of inflation currently stands at 1.3 percent and has undershot the central bank's 2 percent for 5-1/2 years.
Reference: CNBC
Read more: https://www.cnbc.com/
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