Investors were awaiting a speech yesterday morning by Fed chair Janet Yellen for more definitive clues about the timing of an interest rate rise. Low rates risk causing imbalances in the financial system, including a booming commercial real-estate market, which could undermine the expansion, said Ms. George, a prominent skeptic of the Fed’s easy money policies who dissented at the central bank’s July policy meeting when officials declined to raise rates.
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Only 21 percent of market participants see the Fed raising its target rate to 50-75 basis points when it meets on September 20-21, according to the CME’s FedWatch Tool.
“The case is strengthening” for a rate increase, Dallas Fed president Robert Kaplan told CNBC television, whose open-air studio here overlooks the craggy peaks of the Grand Teton National Park.
“I look at it in the context of removing accommodation”, she said.
“We’re [also] making frustratingly slow progress, but some progress on inflation”, he continued. “I think we’re moving toward being able to take another step”.
“I do think it is time to move that rate”, Kansas City Fed President Esther George told CNBC in an interview.
Second-quarter gross domestic product (GDP) data was below economists’ expectations, but George believes that in the second half of 2016, US real GDP could grow by three percent.
George is not the only regional Fed President having a hawkish stance on monetary policy. “In fact, what you’ll do is you’ll tend to keep rates low and I think that’s certainly an appropriate thing for them to do”.
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“We’re in sort of a benign period here”, he added.
