By Howard Schneider WASHINGTON (Reuters) -Inflation lodged above the U.S. Federal Reserve's 2% target could leave policymakers saddled with the difficult choice in coming months of how much risk to take with economic growth and the job market for what may only be modest further improvements in the pace of price increases.

Inflation appears to have gone sideways, while the U.S. economy remains strong, said Minneapolis Fed President Neel Kashkari on Tuesday. With disinflationary progress stalling after the Federal Reserve's aggressive rate hikes in 2022 and 2023, that raises a question.

The strength of the U.S. housing market and potentially stalled progress on inflation means monetary policy may not be as tight as Federal Reserve officials think it is, Minneapolis Federal Reserve President Neel Kashkari said in a new essayon Tuesday that raises the possibility price pressures are "settling" to a level above the Fed's 2% target.

The biggest question facing the U.S. central bank is whether inflation is going to continue to resume its downward trend or settle at around a 3% level,

Federal Reserve Bank of Minneapolis President Neel Kashkari says recent inflation data raise questions about whether monetary policy is restrictive enough to fully return price growth to the central bank’s 2% target.

Federal Reserve Bank of Minneapolis President Neel Kashkari says the Fed will do what is necessary to bring inflation down to 2% during an interview at the Milken Institute Global Conference in Beverly Hills,