Federal Reserve indicates to further interest rate hikes

WASHINGTON, The Federal Reserve anticipated Thursday that a further gradual increase in the interest rate “would most likely be consistent” with several factors in the economy.

The minutes of the Federal Open Market Committee (FOMC), which met in September, noted that “with regard to the outlook for monetary policy beyond this meeting, participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labor market conditions, and inflation near two percent over the medium term.” It added that “this gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee’s objective, against the risk of moving too slowly, which could engender inflation persistently above the objective and possibly contribute to a buildup of financial imbalances.” The minutes stressed that “participants reaffirmed that adjustments to the path for the policy rate would depend on their assessments of the evolution of the economic outlook and risks to the outlook relative to the Committee’s statutory objectives.” “Many of them noted that future adjustments to the target range for the federal funds rate will depend on the evaluation of incoming information and its implications for the economic outlook,” it noted.

It affirmed that “in this context, estimates of the level of the neutral federal funds rate would be only one among many factors that the Committee would consider in making its policy decisions.” On Tuesday, Trump told Fox network that his “biggest threat is the Fed (Federal Reserve) because the Fed is raising rates too fast, and it’s too independent.”

Source: Kuwait News Agency