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