The Federal Reserve says that an increase in interest rates is coming soon, and quarterly hikes are likely in the future—a fundamental shift of its policy over the last few years,
The New York Timesreports. While the Fed has been very cautious regarding signs of economic weakness, the bank is “now willing to shrug off at least a little bad data,” according to the article.
Federal Reserve board member Lael Brainard, who advocates caution when it comes to increasing rates, according to the
Times, told an economic group on Tuesday that its benchmark interest rate is likely to increase soon. It’s a sign that there is little opposition on the Fed’s board to the increase. The Fed raised rates in December and March.
While the June increase seems likely, John Williams, president of the Federal Reserve Bank of San Francisco, said this week that he considers three rate hikes this year a sensible plan, suggesting the Federal Reserve will continue to consider each increase on its own merits rather than automatically increasing the rate every quarter.
Source: "Despite Weak Inflation, Fed Is Likely to Raise Interest Rates in June," The New York Times (May 30, 2017)
