Fed seeks to raise rates, based on more growth and fiscal stimulus: Dudley

The Federal Reserve aims to increase U.S. interest rates in the months ahead if the economy continues to grow a bit above its trend and if, as expected, fiscal policies provide stimulus, an influential Fed policymaker said Wednesday.

“We expect to gradually remove further monetary policy accommodation and snug up interest rates a little bit further in the months ahead” if the pace of U.S. economic growth runs just above 2 percent and inflation continues to rise, New York Fed President William Dudley said.

Little detail on which policies President Donald Trump and Congress will pursue make it “really hard to factor into your forecast,” he said. But “we’re probably going to get some fiscal stimulus at some point, so that is just another factor that tilts the risks to the economy a little to the upside,” Dudley added.

Source: Reuters