Will Fed Accelerate Pace of Rate Hikes This Year?
Federal Reserve officials announce further interest rate hikes One of the newest Federal Reserve politicians, Randal Quarles, called for an increase in interest rates amid rising optimism in business and faster growth in the world's largest economy. Earlier, the Dallas Fed chief Robert Kaplan said that the rates should be gradually raised, but the politician did not specify his views on raising rates in 2018. In turn, the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, said he expects two rate increases this year.
Minutes of the Fed meeting on January 30-31 showed that officials were more optimistic about the economy than in December. They noted a stronger US and global economy, as well as expectations that the republican tax cuts, adopted in December, will contribute to growth. Politicians also noted that the stronger prospects for economic growth have increased the likelihood that further gradual tightening of the policy will be appropriate.
The Fed raised rates three times in 2017 and announced at its December meeting that it expects to make three more increases in 2018. But many analysts believe that the Fed can accelerate the growth of its rates and increase rates to four times this year. The Fed’s base rate is now 1.25-1.5%.