Fed should stand pat on interest rates for now-Bullard

Jerome Powell governor of the U.S. Federal Reserve and President Donald Trump's nominee as chairman of the Federal Reserve speaks during a nomination announcement in the Rose Garden of the White House in Washington D.C. U.S. on Thursday Nov. 2

Jerome Powell governor of the U.S. Federal Reserve and President Donald Trump's nominee as chairman of the Federal Reserve speaks during a nomination announcement in the Rose Garden of the White House in Washington D.C. U.S. on Thursday Nov. 2

Several U.S. Federal Reserve officials have expected that the central bank would continue gradual interest rate hikes amid low inflation and unemployment rate.

Robert Kaplan, president of the Federal Reserve Bank of Dallas, also said on Tuesday that tight US labor market called for the central bank to "patiently, gradually" tighten its monetary policy despite the persistent low inflation.

The survey of consumer expectations, an increasingly valuable gauge as the Fed cautiously raises interest rates in the face of below-target inflation, showed the one-year-ahead measure was 2.61 percent in October, its second monthly rise. The central bank has nonetheless raised rates four times since late 2015 in a nod to strong employment and steady economic growth, and expects to tighten policy again next month.

Kaplan who votes on FOMC this year warned that an overheating job market might create imbalances and excesses in financial markets.

Both gauges have generally slipped since the survey began in mid-2013, covering a period in which spot inflation levels have lingered below a 2-percent Fed target.

"Inflation data during 2017 have surprised to the downside and call into question the idea that USA inflation is reliably returning toward target", Bullard said in prepared remarks during an appearance in Louisville, Kentucky.

The Fed is to hold a policy meeting on December 12-13.