October 2, 2018 / 7:01 PM / a year ago

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

FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan walks after the True Economic Talks event in Mexico City, Mexico, July 14, 2017. REUTERS/Edgard Garrido

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)

Reporting by Ann Saphir; Editing by Chizu Nomiyama

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