Fed officials pushing for rate hike unfazed by market turmoil

28 Aug 2015 | Author: | No comments yet »

Fed’s Bullard Says Volatility Won’t Change Economic Outlook.

Louis Federal Reserve President James Bullard said that while world financial markets are volatile, U.S. fundamentals are good and the interest rate-setting Federal Open Market Committee shouldn’t alter its forecast for the economy. “The key question for the committee is — how much would you want to change the outlook based on the volatility that we’ve seen over the last 10 days, and I think the answer to that is going to be: not very much,” Bullard told Bloomberg Television in an interview Friday at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. “You’ve really got the same trajectory that the committee will be looking at that we were looking at before, so why would we change strategy, which was basically to lift off at some point,” said Bullard, who votes on the FOMC next year. “The committee does not like to move when there’s volatility,” he said. “If we had the meeting this week, people would probably say let’s wait.” He added, “but the meeting is not this week, it’s Sept. 16 and 17.” Bullard also said he would support scheduling a press conference following the Oct. 27-28 FOMC meeting if the committee doesn’t raise rates next month. – Two top Federal Reserve officials who have pressed for interest rate hikes said on Friday that a spate of violent swings in financial markets won’t knock the U.S. economy off its feet. “The U.S. outlook still looks very good,” St. Global stock market volatility has sowed doubts over when the Fed will raise interest rates, particularly since the chief of the New York Fed, who is a close advisor to Fed Chair Janet Yellen, on Wednesday said the case for a September hike now appeared less compelling. While the U.S. is growing at a solid clip, inflation is below the Fed’s target and the global outlook has been dimmed by a Chinese slowdown that is driving down commodity prices and spurring market turbulence.

Futures on the Standard & Poor’s 500 Index fell Friday after the U.S. stock benchmark’s biggest two-day gain since the beginning of the bull market in 2009. Minneapolis Fed President Narayana Kocherlakota said Friday that policy makers should hold off tightening for the rest of this year to underscore their determination to bring inflation up to their 2 percent target.

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