The Federal Reserve raising interest rates next year would signal the central bank feels good about the country\u2019s economic recovery, New York Fed President John Williams said Friday.
\u201cI go into next year feeling [like] the baseline outlook is a very good one. Therefore, actually raising interest rates would be a sign of a positive development in terms of where we are in the economic cycle,\u201d Williams said in an interview with CNBC.
\u201cI\u2019m pretty optimistic that we\u2019re seeing really strong improvements in the labor market. You\u2019re seeing the unemployment rate come down quickly,\u201d Williams added.
His comments came after the Fed signaled earlier this week that it sees as many as three rate hikes in 2022. The Fed cut rates to near-zero levels in March 2020 as part of its efforts to support the economy at the onset of the Covid-19 pandemic. The central bank also said this week it would aggressively dial back its bond-buying program.
That rate forecast comes during an increase in U.S. inflation. The consumer price index, which tracks the price of everything from cars to food to rent surged 6.8% in November on a year-over-year basis. That marks its fastest acceleration since 1982. The producer price index, another inflation measure that tracks wholesale prices, increased last month by 9.6%, its fastest pace on record.
\u201cWe\u2019re very focused on inflation; it is obviously too high right now,\u201d Williams said. \u201cWe want to make sure inflation comes back down to our 2% longer-run goal.\u201d
However, Williams noted that the Fed doesn\u2019t need to further speed up the tapering of its asset purchase program to temper the recent inflation surge.
On Wednesday, the Fed announced it will be buying $60 billion in bonds per month starting in January. That\u2019s half of what it was buying prior to November. It also puts the Fed on track to wrap up its program by March.
\u201cI don\u2019t see that there\u2019s any real benefit to try to speed it up further,\u201d Williams said. \u201cWe like to do things in a way that\u2019s very carefully studied, very carefully communicated \u2026 without creating disruption in markets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The Federal Reserve raising interest rates next year would signal the central bank feels good about the country\u2019s economic recovery, New York Fed President John Williams said Friday.\u201cI go into next year feeling [like] the baseline outlook is a very good one. Therefore, actually raising interest rates would be a sign of a positive development …<\/p>\n","protected":false},"author":13,"featured_media":53116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[38,39,36],"tags":[6978,6885,8143,7537,6858],"class_list":["post-57096","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-commodities-news","category-global-stock-markets","category-market-updates","tag-cpi","tag-fed","tag-interest-rate-hikes","tag-optimism","tag-us-economy"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/57096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=57096"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/57096\/revisions"}],"predecessor-version":[{"id":57100,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/57096\/revisions\/57100"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/53116"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=57096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=57096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=57096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}