Tags: federal reserve | mester | interest rate | hike

Fed's Mester: June Is a 'Viable Option' for Rate Increase

Monday, 23 March 2015 07:56 AM

Federal Reserve Bank of Cleveland President Loretta Mester said the U.S. economy is strengthening and a June interest-rate increase remains a possibility.

In an interview on Bloomberg Television in Paris on Monday, Mester said the current weakness in the economy is “transitory” and she’s “more optimistic” about the outlook.

“The headwinds we have been suffering through are abating, financially both consumers and business balance sheets look good, banks are recapitalized, she said. ‘‘So I see some strength of the economy.’’

Mester said the Fed’s removal of ‘‘patient’’ from its recent statement means ‘‘June is a viable option’’ for tightening. Speaking on March 18, Fed Chair Janet Yellen said the change should not be read as indicating the central bank has decided on the timing of the first rate increase. While April is ‘‘unlikely,’’ June shouldn’t be ruled out, Yellen said.

‘‘It would be appropriate to raise interest rates sometime this year,’’ said Mester, who votes on the Federal Open Market Committee next year. ‘‘We are not going to necessarily move in June but it gives us June as a viable option.’’

Asked about the dollar, she said it reflects the fact that the U.S. ‘‘is relatively stronger than other countries.’’ She also said it will curb exports, which will be a negative for expansion in 2015.

While the drop in oil prices is a negative for oil-sector investment, that’s a ‘‘small part of the economy.’’

‘‘In terms of being able to spur growth in terms of consumer spending, its going to be a positive,’’ Mester said.


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Federal Reserve Bank of Cleveland President Loretta Mester said the U.S. economy is strengthening and a June interest-rate increase remains a possibility.
federal reserve, mester, interest rate, hike
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2015-56-23
Monday, 23 March 2015 07:56 AM
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