Fed’s Vice Clarida confident interest-rate hikes is the way forward
- 1 month ago
Federal Reserve Vice Chairman Richard Clarida today backed continued gradual interest rate hikes however stressed monetary policy is not on a pre-set course at a conference sponsored by The Clearing House in New York.
Clarida stated that rates were closer to neutral than when the Fed begun to hike rates in 2015 however mentioned that there is no agreement at the Federal Open Market Committee as to how neutral the rates really are.
The Fed’s Vice added that interest-rate policy is “more art than science and the goal should be to sustain the expansion.”
“Monetary policy at this stage of the economic expansion should be aimed at sustaining growth and maximum employment at levels consistent with our inflation objectives,”
He continued by saying that due to the uncertainties surrounding the outlook, continued gradual rate hikes is the solution.
Clarida said the Fed is constantly updating its estimates of the level of unemployment consistent with stable inflation and the “neutral” level of interest.
He also mentioned that the outcome of studying the variables produced by data, “supports the case for gradual policy normalization, as it will allow the Fed to accumulate more information from the data about the ultimate destination for the policy rate and the unemployment rate at a time when inflation is close to our 2% objective.”
Source: Smart Trend Team/ Marketwatch