Fed’s Powell Sees Two Possible Interest Rate Hikes This Year
Federal Reserve Governor Jerome Powell commented yesterday on rising interest rates during an event hosted by The Wall Street Journal in Washington DC. Powell remarked, “My own forecast calls for liftoff [in interest rates] in September and for an additional increase in December.” Powell is the third Federal Reserve representative to comment on plans to increase rates this year after last Wednesday’s Federal Reserve Board’s policy meeting. On Friday, Federal Reserve Bank President of San Francisco, John Williams, and Federal Reserve Bank President of Cleveland, Loretta Mester, noted their support of total interest rate increases of .25 percent this year.
At the DC event, Powell went onto say, “I don’t think the odds are 100% . . . that we will realize those conditions, but this is my forecast.” He remarked that odds were closer to 50-50 percent that the Federal Reserve will increase rates by September. The conditions include continued strong economic growth and improvement in the labor market. The Federal Reserve has kept interest rates near zero since December of 2008. Although market uncertainty continues, it seems likely that the Fed will impose a rate increase in the near future.