Fed's Kaplan: Open to looking at longer time frame for inflation

FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks at the Commonwealth Club in San Francisco, U.S., October 11, 2019. REUTERS/Ann Saphir

(Reuters) - Dallas Federal Reserve Bank President Robert Kaplan said on Wednesday that he is open minded about looking at an average period longer than 12 months for the economy’s inflation.

"I am open minded about looking at, regarding inflation, an averaging period that’s longer than 12 months. Currently the way we look at inflation is trailing 12 months. I think some analytic that gives us an opportunity to look at inflation over a longer time frame than 12 months, which takes into account underages and overages, I’m open minded about that", Kaplan told the Wall Street Journal in an interview

His comments came a day after Fed Governor Lael Brainard said the central bank should move from a strict 2% inflation target to a broad, “flexible” promise that inflation would average that level over time. The discussion is part of a broad review of the Fed’s operating framework that kicked off this year and is expected to wrap up in 2020.

Reporting by Kanishka Singh in Bengaluru; Editing by Dan Burns