Fed's Daly sees inflation moving back up to 2% target

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He said it was necessary to prop up the economy, citing recent weakness in inflation.

While economic data has largely been positive - unemployment stands at 3.6 percent, a 50-year low, for example - inflation has remained elusive, removing the need for the Fed to hike rates to keep the economy from overheating.

The US Federal Reserve has sent markets a sobering message.

"The hurdle for cuts is very high", said Tom Porcelli, US strategist for RBC Capital and a former Fed official.

"Members observed that a patient approach to determining future adjustments to the target range for the federal funds rate would likely remain appropriate for some time, especially in an environment of moderate economic growth and muted inflation pressures, even if global economic and financial conditions continued to improve", the meeting summary stated.

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In a report published on Reuters, Bullard who was addressing a meeting at the Foreign Correspondents' Club (FCC) in Hong Kong on Wednesday, 22nd May, said that the Fed Reserve missing its two per cent target of controlling inflation would impact the establishing of the Federal Open Market Committee (FOMC). -China trade could slow growth, though it was too soon to know.

Trump has slammed the Fed on Twitter for "incessantly" raising interest rates despite low inflation, and called on officials to cut the rate by a full percentage point. "Several" warned, on the other hand, that inflation could weaken.

'Other sources of uncertainty remained.

In comments in Hong Kong overnight, St. Louis Fed president James Bullard said that a failure to resolve the trade dispute in the near term could change global trading patterns, and is another reason for the Fed "to tread carefully".

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