Two Regional Bank Chiefs Doubt Fed Would Raise Rates Twice This Year
August 29 2016 - 1:10AM
Dow Jones News
JACKSON HOLE, Wyo.—Two Fed officials have played down the
likelihood of two rate increases this year beginning as soon as
next month, after the U.S. central bank's second-in-command floated
the idea on the sidelines of the Kansas City Fed's research
conference.
Vice Chairman Stanley Fischer told CNBCÂ on Friday that Fed
Chairwoman Janet Yellen's Jackson Hole speech, in which she said
the case for a rate increase has strengthened, was consistent with
the central bank potentially raising rates at its meeting next
month and again before the end of the year, if data shows the
economy performing well.
In interviews with The Wall Street Journal early Saturday,
however, two regional Federal Reserve bank presidents distanced
themselves from the idea of two rate increases this year.
" The calendar would allow that, we have three more meetings,"
Federal Reserve Bank of Atlanta President Dennis Lockhart said,
although he added "I wouldn't take [Mr. Fisher's] position
today."
"If the economy in the next few weeks performs consistent with
my sense of the economy, then I think we ought to have a serious
discussion [about interest rates] at the September meeting," Mr.
Lockhart said.
While he viewed the overall global risk environment as a bit
more settled, the focus is on the domestic economy, which is
"chugging along," Mr. Lockhart said. "Probably the conditions will
be satisfactory for at least one more" rate increase this year, the
Atlanta Fed president said.
The Fed last raised its key interest rate by quarter percentage
point in December.
Meanwhile, Mr. Lockhart's counterpart at the St. Louis Fed,
James Bullard, reiterated that he is "agnostic" about the timing of
the next rate increase, but he said two rate increases this year
wouldn't fit with his forecasts.
"If we had a lot of good news and we got into the September
meeting and other people wanted to go, I could support that—but
again I'm talking about one increase and no planned increases after
that," he told The Wall Street Journal.
Following Ms. Yellen's speech on Friday, financial markets
raised their expectations for an interest-rate increase by the end
of this year, with some economists saying an increase could come as
early as next month.
Write to Harriet Torry at harriet.torry@wsj.com
(END) Dow Jones Newswires
August 29, 2016 00:55 ET (04:55 GMT)
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