Clarida says Fed won't raise rates until its sees 2% inflation

FILE PHOTO: Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day "Challenges for Monetary Policy" conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby/File Photo

(Reuters) - Federal Reserve Vice Chair Richard Clarida on Wednesday reiterated that the U.S. central bank won’t raise interest rates until inflation reaches 2%, and he expressed confidence that market participants believe in that promise, a key element in the Fed’s strategy.

“We are not going to lift off until we get inflation at 2% for a year. ... We are trying to tie our hands. We are saying we are not going to hike until we get to 2%,” Clarida told a conference held by the Hoover Institution. “It actually doesn’t seem lacking credibility to markets that we are going to do that.”

Reporting by Howard Schneider and Ann Saphir; Editing by Leslie Adler