Earlier this week, Charles Evans who is a senior US central banker and a member of the open markets committee of America’s Central Bank, the Federal Reserve was visiting Ireland discussing the world economy and Brexit among the key topics.
However during the visit he also made some very interesting comments on the economy in America and the future plans for interest rates. The video is below but here are the highlights.
On interest rates hikes:
“Maybe two increases might be a sensible conservative way to go, but three increases could easily be acceptable.”
He also refused to rule out four increases during the year with the right economic conditions.
When rates might go up:
“Three rate increases would mean an inaction at one of the quarterly meetings, if you focus only on them, but we could raise rates at a different meeting, but so far we have not.”
- The recent increase is only the third change of the interest rate since 2008. It follows increases in December of 2015 and 2016 where the rate changed by 0.25%.
- The recent increases are the only three since 2006. The three changes in 2007 and the seven changes in 2008 were all decreases.
- If the Fed raises rates three or more times this year, it will mark the first time in 11 years rates have increased.
- In 2006 the Fed increased the rate four times and that was to cool the housing market bubble.
To view the video of Charles Evans comments, click here.