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'US Fed won't begin raising rates until inflation hits 2%'
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IANS | 24 Sep, 2020
The US Federal Reserve will not consider raising interest rates from
near zero until inflation has hit the 2 per cent target, said the
central bank's Vice Chairman Richard Clarida.
"We're not going to
even begin to think about lifting off, we expect, until we actually get
observed inflation -- and we measure it on a year-over-year basis,
equal to 2 per cent," Xinhua news agency quoted Clarida as saying in an
interview on Wednesday.
"We now think that to anchor inflation
expectations at 2 per cent, we need, coming out of recessions, to spend
some time above 2% to balance off those times that we've been below,"
Clarida said.
"We don't want it to be a fleeting, you know, one quarter and done."
Clarida
noted that it would take several years before the Fed starts raising
rates, as the US economy is recovering from the Covid-19 induced
recession.
"The economy is recovering robustly, but we are still in a deep hole," he said.
The
Fed last week kept its benchmark interest rate unchanged at the
record-low level of near zero and signaled to maintain this target range
until at least 2023, noting that the path of the economy will depend
significantly on the course of the coronavirus.
Clarida's remarks
came after Charles Evans, president of the Federal Reserve Bank of
Chicago, said on Tuesday that the Fed could raise rates before inflation
averages 2 per cent for some period of time.
The Fed announced
in August that it will seek to achieve inflation that averages 2 per
cent over time, a new strategy for carrying out monetary policy to help
fight the Covid-19 pandemic and boost economic recovery.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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