Investors pricing in a federal funds rate hike in mid-2015 could get caught off guard, former Federal Reserve Governor Robert Heller told CNBC on Wednesday.
“I think that’s what the current Federal Reserve Board thinks will be the right time,” said Heller, referring to expectations of a rate rise in mid-2015.
“I still think markets will force the Fed to tighten a little bit earlier than that. So it may well happen around the turn of the year as we approach 2015, that is also around the time that the tapering operation should be finished,” he added.
The Federal Reserve has kept its benchmark interest rate near zero since 2008, when a global financial crisis that plunged financial markets into turmoil.
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