The US Federal Reserve’s new framework means it will tolerate a slight overrun in inflation, Dallas Federal Reserve Chairman Robert Kaplan said Thursday. “A moderate overshoot in inflation probably means 2.25% or 2.5%,” Kaplan explained.
“The Fed’s new framework is not a commitment on what the Fed will do.”
“The new framework suggests that the US economy may have the capacity to handle a hotter job market than in the past.”
“It is wise to move forward, without assuming that the future will look like the past.”
“Markets should not rely on the Fed’s emergency lending programs forever; they will disappear.”
The US dollar index showed no reaction to these comments and was last seen rising 0.2% on the day to 93.08.