The Federal Reserve announced last week it would leave interest rates unchanged. This came after months and months of economists and financial experts being certain the United States central bank would raise rates for the first time since 2006.
One Fed president believes it’s time to start increasing interest rates, and it may come as early as next month. Maybe. Perhaps.
Speaking in an interview with CNBC on Monday, St. Louis Fed President James Bullard espoused how it’s time to hike rates and policymakers at the Fed should refrain from reacting to the volatility in the stock market.
Referring to last week’s decision as a “close call,” Bullard left open the possibility of lifting rates during the next Federal Open Market Committee (FOMC) meeting in October.
“There’s a chance,” he told the business news outlet. “[But] the problem with going from one meeting to the next is how much information has really changed.”
Although not a voting member on the FOMC, Bullard noted that he “would have dissented on this decision. Richmond Fed President Jeffrey Lacker was the only dissenting vote last week.
“There’s a powerful case to be made that it’s time to raise interest rates. And the case is not complicated. … Policy settings are [in] an emergency. The economy itself, the goals of the committee, have essentially been met.”
He added that even if rates were to go up, monetary policy would still remain the same. In other words, it would be accommodative.
Leave a Comment