HONG KONG, March 27 (Reuters) - A senior U.S. Federal Reserve official said in Hong Kong on Thursday that raising the inflation target from 2 percent to 4 percent is not a good idea.
James Bullard, president of the Federal Reserve Bank of St. Louis, said the Fed’s unconventional monetary policies are effective, even as he nodded to the possibility they may be sub-optimal and therefore contributing to unnecessary global volatility.
He also said that, although the output gap is supposed to be closed in 2016 and while inflation is on target, it looks like the funds rate would be below the long-term fund rate.
Bullard was speaking on a panel at the annual Credit Suisse investor conference in Hong Kong. (Reporting By Michael Flaherty and Saikat Chatterjee; Writing by James Pomfret; Editing by Paul Tait)