There is no reason to keep interest rates at record lows near zero, a top central banker at the Federal Reserve said Thursday.
The current unemployment rate of 5 percent is “statistically indistinguishable” from the Fed’s long-term goals, James Bullard, President of the St. Louis Federal Reserve said.
“In addition, the current year-over-year inflation rate, while low, reflects an outsized oil price shock that occurred during 2014.”
Bullard notes the Dallas Fed’s trimmed mean inflation annualized rate is currently running at 1.7 percent, just 30 basis points below the FOMC’s inflation target of 2 percent.
“By these measures, the Committee’s goals have been met. On the other hand, the Committee’s policy settings remain far from normal,” he added.
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