Published: Wed, August 31, 2016
Economy | By Melissa Porter

Fed's George: Time for USA to Raise Rates

In remarks to Bloomberg TV, Robert Kaplan, the president of the Federal Reserve bank of Dallas, said the monetary authority had used its tools "aggressively".

While she favours higher rates now, she said her view could be shifted by economic data in advance of the September 20-21 meeting. It last raised rates from near-zero levels in December in its first hike in almost a decade.

"I see a gradual upward pace in interest rates as being appropriate", Mester said in a television interview with CNBC from Jackson Hole, Wyoming. "If it were me, I would not raise rates right now for reasons that I don't think that the inflation rate is moving sufficiently in the direction we need to see it move, but on the other hand, that's a judgment call".

"Growth issues and worldwide issues in that context are more important (than the presidential race), but that consideration would speak for a hike in September rather than later", he told CNBC. "It doesn't mean I think it needs to happen rapidly". You can not stimulate growth just by monetary policies alone, so you need fiscal policies, structural policies.

Investors were awaiting a speech yesterday morning by Fed chair Janet Yellen for more definitive clues about the timing of an interest rate rise. Low rates risk causing imbalances in the financial system, including a booming commercial real-estate market, which could undermine the expansion, said Ms. George, a prominent skeptic of the Fed's easy money policies who dissented at the central bank's July policy meeting when officials declined to raise rates.

However, Wittmann told CNBC: "US domestic economic conditions clearly warrant a hike and the worldwide landscape is now calmer than before".

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