March 31, 2012 / 11:48 PM / in 6 years

Fed's Kocherlakota sees 2.3 percent inflation in 2013

EVANSTON, Illinois (Reuters) - U.S. inflation will be above the Federal Reserve’s 2 percent target next year, Minneapolis Fed President Narayana Kocherlakota predicted on Saturday, suggesting he sees pressure building for the central bank to lift interest rates.

“I‘m expecting inflation to be 2 percent this year, and 2.3 percent next year,” Kocherlakota told the Midwest Economics Association’s annual meeting.

The Fed has kept U.S. short-term borrowing costs near zero for more than three years, and its policy-setting panel has said it expects to need to keep them there through late 2014.

Kocherlakota, a monetary policy hawk, has said he believes the Fed should act to raise rates well before then.

Reporting by Ann Saphir; Editing by Paul Simao

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