(Adds Kaplan comments)
HOUSTON, July 13 (Reuters) - Global headwinds mean that U.S. monetary policy is modestly, but not wildly, accommodative, and the Federal Reserve needs to keep it so as long as employment and inflation fall short of its goals, a top Fed official said on Wednesday.
A "slow, gradual, careful" approach to raising interest rates is very appropriate, Dallas Fed President Robert Kaplan said in a speech in Houston.
He added that the U.S. central bank needed to calibrate monetary policy more cautiously now than it did just five or six years ago in the face of China's economic slowdown and the possible impact of Brexit on global and U.S. economic growth.
The Fed lifted rates in December for the first time in nearly a decade, but it has been unable to raise them this year due to disappointing economic data and fresh setbacks on the global front.
Low rates have helped the U.S. economy make "good progress" toward the Fed's full employment goal and slow progress toward the central bank's 2 percent inflation goal, Kaplan said.
But the so-called neutral rate - the interest rate at which the economy is neither over- or under-stimulated - has fallen over the past decade, undercutting some of the stimulative effect that current low rates would otherwise have, he said.
The Fed is "very sensitive" to the strength of the dollar even though manufacturing and exports have declined as a share of U.S. gross domestic product, he said.
Kaplan said he expects GDP growth of 2 percent this year, which he described as "slow." Boosting growth, he said, is the most important issue at this point, even though doing so requires structural reforms not within the Fed's purview.