Fed key rate closer to 'neutral,' should be patient on inflation: Kaplan

[ARLINGTON] The Federal Reserve's key interest rate is getting close to a "neutral" level so the Fed should patiently wait for further evidence that inflation will rise before tightening policy again, Dallas Fed President Rob Kaplan said on Friday.

"I want to now see more evidence that we are making progress in reaching our inflation objective," he told a University of Texas at Arlington audience, saying the so-called neutral rate is likely closer to 2 per cent than to 3 per cent. The Fed has raised its key rate to a range of 1 to 1.25 per cent.

REUTERS