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US interest rates closer to 'neutral', Fed's Clarida says

By Alexander Bueso

Date: Friday 16 Nov 2018

US interest rates closer to 'neutral', Fed's Clarida says

(Sharecast News) - The US central bank's second-in-command noted recent volatility in stock markets, but continued to defend the need for gradual rate hikes.


Indeed, in an interview with broadcaster CNBC, the vice-president of the Federal Reserve, Richard Clarida, said there was no clear economic signal that he would take from that volatility.

But Clarida also said he wanted to "emphasise" that "we are at a point now where we need to be especially data dependent."

He also took issue with those who argued that interest rate hikes were proceeding too fast or had gone too far, stressing that they had in fact been gradual, with the tightening having started three years ago - from zero - and still in process.

Even so, with benchmark short-term interest rates getting closer to 'neutral' "by some estimates", it was now time to turn more "data dependent", he explained.

On economic conditions overseas, Clarida said it was something that rate-setters had to pay attention to.

In any case, monetary policy would continue to be set with the aim in mind of meeting the policy mandate given to them by Congress, a strong jobs market and inflation at 2.0%.

As of 1824 GMT, the yield on the benchmark 10-year US Treasury note was down by three basis points to 3.08%.





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