Members of Fed show caution over rate hikes
US Federal Reserve policymakers can wait on any further interest rate hikes until they have a better handle on whether growing risks will undercut an otherwise solid US economic outlook, several policymakers said on Wednesday.
After months of tumult in the stock market and rising speculation over a coming recession, presidents of four of the 12 Fed regional banks said they wanted greater clarity on the state of the economy before extending the central bank’s rate hike campaign any further.
Three of the four, Charles Evans of Chicago, Eric Rosengren of Boston, and James Bullard of St Louis, are voting members this year on the Federal Open Market Committee, the bank’s 10-member policy-setting panel.
Bullard has long been critical of the Fed’s rate increases, begun in December 2015, but the caution from Evans and Rosengren is new, even if they both believe growth will remain solid and rates will probably need to rise more.
The fourth president, Raphael Bostic of Atlanta, said there was no urgency to raise rates further at this juncture.
The remarks from the four come less than a week after Fed chairman Jerome Powell eased market concerns that policy makers were ignoring signs of an economic slowdown. Powell said he was aware of the risks and would be patient.