Fed’s Kaplan sticks to call for gradual rate hikes toward ‘neutral’

EL PASO, Texas (Reuters) – Federal Reserve Bank of Dallas President Robert Kaplan said on Tuesday that with the U.S. economy at or past full employment, and inflation at the Fed’s 2-percent goal, the Fed should move rates gradually toward “neutral” and then stop to assess the situation.

The Fed last week raised interest rates for a third time this year to a range of 2 percent to 2.25 percent. Kaplan said Tuesday he believes “neutral” is between 2.5 percent and 2.75 percent, possibly a little lower. Other Fed policymakers expect to raise them another four times before the end of next year.

(This version of the story corrects day of week in second paragraph)

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