Federal Reserve Bank of St. Louis President James Bullard said the central bank ought not rush to raising interest rates next month because uncertainty over the Trump administration’s fiscal policies clouds the U.S. economic outlook.
“It is unlikely that fiscal uncertainty will be meaningfully resolved by the March meeting, which is only a few weeks away,” Bullard, who doesn’t vote on policy this year, told reporters Thursday after a speech at Washington University in St. Louis. “Why not wait until that gets resolved?”
The policy-making Federal Open Market Committee next meets March 14-15 in Washington. Investors give roughly a one-in-four chance of an increase at that gathering, according to pricing in federal fund futures contracts, rising to around 68 percent by June.
Bullard’s caution compares to Philadelphia Fed President Patrick Harker and San Francisco’s John Williams, who have said they see a rate hike as a possibility at next meeting. Officials projected three quarter-point increases this year, according to their median quarterly estimate in December. Bullard says he only projects one increase in 2017.
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