Several Fed Officials Say They Are Ready to Raise Rates
Source: New York Times
Several Federal Reserve officials suggested in separate remarks on Thursday that they were ready to start raising the central bank’s benchmark interest rate in December. But they emphasized that they wanted to move slowly and cautiously because the economy remained unusually weak.
William C. Dudley, the president of the Federal Reserve Bank of New York, was the first to signal, in late August, that the Fed would not raise rates at its September meeting, and he said on Thursday that his reasons for hesitation had receded. He said he now saw a stronger case for the Federal Open Market Committee of the Fed to raise rates.
“I think it is quite possible that the conditions the committee has established to begin to normalize monetary policy could soon be satisfied,” Mr. Dudley told the Economic Club of New York. He said he viewed the risks of acting too soon and waiting too long as “nearly balanced.”
The Fed has held interest rates near zero since December 2008 to stimulate economic activity by encouraging risk-taking by investors and borrowing by businesses and consumers. Raising rates would begin to reduce that effect. Indeed, as investors anticipate liftoff, borrowing costs have already started to rise. The average rate on a prime mortgage loan reached 3.98 percent last week, according to Freddie Mac, the highest level since the summer, when investors last expected the Fed to act.
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Read more: http://www.nytimes.com/2015/11/13/business/economy/several-fed-officials-say-they-are-ready-to-raise-rates.html
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