Four Regional Fed Chiefs Urge Caution on More Rate Hikes
January 9, 2019
Four presidents of regional Federal Reserve Banks are urging a pause on additional interest rate hikes until there is a better understanding on the state of the economy.
According to a Reuters report, three of the four regional Fed leaders—Charles Evans of Chicago, Eric Rosengren of Boston and James Bullard of St. Louis—are voting members on the Federal Open Market Committee, the central bank’s policymaking panel; the fourth is Raphael Bostic of Atlanta, who has stated there was no urgency to raise rates at this time.
The statements on slowing the rate hike strategy follows December’s hike, which came amid a significant drop in the U.S. stock market. Although Fed forecasts after the December rate hikes called for two more rate hikes this year, the new comments suggest that is not a done deal.
“There should be no particular bias toward raising or lowering rates until the data more clearly indicate the path for domestic and international economic growth,” said Rosengren to an audience at the Boston Economic Club. “I believe we can wait for greater clarity before adjusting policy.”
Bullard told the Wall Street Journal that while the Fed had “a good level of the policy rate today” and he did not see any reason for rates to go higher while Evans, who was on the record in supporting three rate hikes this year, told reporters that the Fed has “good capacity to wait and carefully take stock of the incoming data and other developments.”
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