By Howard Schneider
(Reuters) policy to a restrictive attitude that can push the economy further from one of the Feds main goal, said James Bullard, president of the St. Louis Federal Reserve Bank, on Thursday.
Bullard, in commentary on journalists following an appearance at St. Cloud State University in Minnesota, said he now, with an inflation-adjusted basis, sees the current federal fund rate as "a bit restrictive."
"We put pressure on inflation instead of upward pressure" that can die further under the Fed's 2 percent goal, Bullard said.
Bullard said he expects the Fed to miss this inflation target again in 201
Following a December increase in demand that was a matter of special controversy, Bullard is the first Fed official to propose that the central bank had actually exceeded, and can now actually slow down growth – and the price of price increases – even if it does not to do it.
Referring to the steady release of inflation errors, Bullard said, "I think it has hurt us to have lost continuously on the low side."
Bullard, who's a pick on interest rate policy this year, in his speech in St. Cloud State, said the Fed needed to "tread gently" this year in its decisions.
Feden increased rates four times last year, but now appears to be on hold in the current range between 2.25 and 2.5 percent.
Compared to the 2 percent target, the Fed has preferred an average rate of inflation of 1.6 percent since 2012, roughly what some inflation-assured securities indicate is the expected level in the years to come.
Throughout much of last year's Fed officials felt the years of "accommodating" policy had finally given some impetus to inflation and increased it close to target. Meeting or exceeding the targeted inflation level is a key goal for policy makers, who see a low but steady rise in prices as a sign of economic health, important to keeping wages and investments on track.
Merger media or anyone involved in Fusion Media does not accept liability for any loss or damage resulting therefrom. of trust in the information, including data, quotes, charts and buy / sell signals found on this website. Be well informed about the risks and costs of trading with the financial markets, which is one of the most risky forms of investment.