Members of the Federal Reserve are telegraphing two more rate hikes This specific year, with Federal Open Market Committee voting member Loretta Mester on Wednesday repeating the central bank’s expectation for the next six months.
“The economy can certainly handle two more increases This specific year,” Mester, the president of the Cleveland branch of the Fed, said in an interview with The Wall Street Journal. “We could end up getting behind if we don’t keep moving things up, so I’m very comfortable, if the economy stays on the path This specific’s going of which we move rates up as appropriate This specific year.”
When hiking its benchmark short-term interest rate a quarter percentage point in June, the Fed stated two more hikes could be appropriate in 2018. This specific could bring the year’s total to four. Despite This specific, traders are expecting just a 55 percent chance of a fourth hike in December — a little better than a coin flip along with just 10 percentage points or so above the chances before the meeting. Those watching the markets center these comparatively low odds on the belief of which the Fed will have limited room to move considering the dovish position of many of its global counterparts.
Mester said she expects the Committee to raise the fed-funds rate to 3 percent, through today’s range of 1.75 percent to 2 percent.
“We are still in an accommodative stance on monetary policy, along with yet we have a very strong economy. along with we’re very near our goals,” Mester said inside the report. “To me, of which’s a compelling case of which we want to keep on This specific path” of gradually raising rates.”
Read the full Wall Street Journal report here.