Fed Barkin Says Gradually Raising Rates a Sensible Approach

The U.S. economy is strong enough to warrant further interest rate increases by the Federal Reserve, Richmond Fed President Thomas Barkin said on Wednesday.

In a speech on the U.S. economy, Barkin argued that the Fed’s benchmark interest rate was below normal levels, a suggestion that Fed policy was still stimulating economic growth, which he said was solid.



“It is difficult to argue that lower than normal rates are appropriate when unemployment is low and inflation is effectively at the Feds target,” Barkin said in Roanoke, Virginia.

The U.S. central bank kept interest rates unchanged last week, but its statement pointed to strength in the economy and bolstered expectations it would raise borrowing costs in September.

The Fed has been slowly raising interest rates since 2015. Barkin told reporters afterward that gradually raising rates was a “sensible” approach.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza