Mem­bers of Fed show cau­tion over rate hikes

Yorkshire Post - Business - - BUSINESS / MARKET REPORT -

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.

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