Clarida Vows to Keep Rates Until Inflation Hits 2%

The Vice Chairman of the United States Federal Reserve, Richard Clarida, said on Wednesday that the Fed will not raise rates until the 2% inflation target is achieved.

“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%. That is at least, we could actually keep rates at this level even beyond that.” Clarida told Bloomberg in a TV interview.

“We don’t want it to be a fleeting, you know, one quarter and done.”

“At that point we will assess what is the appropriate liftoff and timing, but that’s really down the road.”

“The economy is recovering robustly, but we are still in a deep hole.”

“Long term, the U.S. needs to get back on a sustainable fiscal path, but you don’t want to start that in the midsts of the worst economic hit in 90 years.”