Federal Reserve President John Williams Calls for Rate Hike
Rate Hikes “Preferably Sooner Rather than Later”
With economic data indicating strength in the U.S. economy, rate hikes are back on the table. This time, it’s the San Francisco Federal Reserve Bank President John Williams who is calling for interest rate increases.
In a speech in Alaska on Thursday, Williams said that, “In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later.” (Source: “Longview: The Economic Outlook,” Federal Reserve Bank of San Francisco, August 18, 2016.)
Williams pointed out that even though inflation is still at steady levels, it’s better to, “ease off the gas,” when, “nearing the intersection,” rather than, “wait until you get right in front of the red light”.
“If we wait until we see the whites of inflation’s eyes, we don’t just risk having to slam on the monetary policy brakes, we risk having to throw the economy into reverse to undo the damage of overshooting the mark,” he explained. “And that creates its own risks of a hard landing or even a recession.”
Williams is not alone on this matter. New York Fed President William Dudley is also upbeat about the U.S. economy. In a briefing for reporters on Thursday, he said that, “the second half [GDP] should be more than two percent,” and that, “job gains have remained very sturdy…the labor market is continuing to tighten.” (Source: “Fed’s Dudley Is Upbeat on Outlook for Growth and Jobs,” MarketWatch, August 18, 2016.)
Based on this outlook, Dudley said that, “we are edging closer toward the point in time when it will be appropriate to raise rates further,” and that a rate hike in September, “is possible”.
Atlanta Fed President Dennis Lockhart also believes that the U.S. economy is in good shape. In a speech to the Rotary Club of Knoxville, Tennessee on Tuesday, he said, “Early indications of third-quarter GDP growth suggest a rebound. I don’t believe momentum has stalled.” (Source: “Gauging Current Economic Momentum,” Federal Reserve Bank of Atlanta, August 16, 2016.)
“I, as one Fed policymaker, am not prepared to rule out at least one rate hike before year’s end,” he added.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.