Saturday September 22nd, 2018 1:49AM

Fed member sees gradual interest rates hikes in short term

By The Associated Press

JACKSON, Miss. (AP) — Atlanta Federal Reserve Bank President Raphael Bostic said Thursday that he believes growth remains strong despite uncertainty over trade tensions, and he expects interest rates to continue to rise to a point where they neither stimulate nor slow the economy.

"When the economy is doing well and standing on its own, as it is now, I think monetary policy ought to be moving toward a neutral stance," Bostic said in a speech before the Mississippi Council on Economic Education "For me, this means a gradual increase in nominal interest rates over the next handful of quarters."

The central banker said he remains concerned about the uncertainty being created by President Donald Trump's confrontational and protectionist trade policy.

"An uncertain outlook can cause firms to delay investments while they wait to see how the situation unfolds. Such a development could grow to have macroeconomic ramifications the longer the uncertainty remains," Bostic said. He said a recent survey shows trade war fears have had "only a small negative effect on U.S. business investment so far." However, Bostic said the uncertainty appears concentrated in the investment-heavy manufacturing sector.

Bostic said the economic stimulus from recent corporate tax cuts has taken longer to filter through the economy than he'd expected, as businesses had to figure out how the complicated changes would affect them.

He says he thinks the drag from trade fears and the push from lower taxes are roughly balanced right now.

Bostic's occasional public speeches are sifted carefully by bankers and traders for hints on future Fed actions. He participates in the Federal Reserve's discussions on monetary policy such as setting interest rates or buying bonds, and is a voting member of the interest-rate setting Federal Open Market Committee.

The speech follows August's meeting of the committee, where members left the interest rate they charge other banks in the 1.75 percent to 2 percent range, saying the risks of inflation and unemployment were "balanced."

Traders expect two more interest rate increases before the end of the year. Bostic, speaking to reporters after the meeting, said he remains open to a second increase before the end of the year, depending on what data show. Bostic said he thought the neutral interest rate should be between 2.5 percent and 2.75 percent.

___

Follow Jeff Amy on Twitter at http://twitter.com/jeffamy . Read his work at https://www.apnews.com/search/By%20Jeff%20Amy .

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Online - Georgia News, AP Business - Economy, AP Business - Industries, AP Business - Financial Services
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Gunman kills ex-wife, 4 others and himself in California
A gunman in Southern California fatally shot his ex-wife and a man at a trucking company before chasing after another man, killing him, and then driving to a home where he shot dead a father and daughter in a nearly 40-minute rampage
7:00PM ( 1 minute ago )
Mets hit back-to-back homers in 9th, stun Marlins 4-3
Michael Conforto and Todd Frazier hit back-to-back homers with two outs in the ninth inning, and the New York Mets stunned the Miami Marlins 4-3 in the first game of a doubleheader
6:50PM ( 11 minutes ago )
Smart outraged by planned release of 1 of her kidnappers
Elizabeth Smart said Thursday the news that one of her kidnappers will be released next week was "a big shock," but while she urged authorities to reconsider the decision she also conceded there is no viable, legal recourse for her to pursue
6:44PM ( 18 minutes ago )
Associated Press (AP)
Humbled Illinois governor admits errors, pleads for 2nd term
A humbled Gov. Bruce Rauner is promising a different kind of governor in a second term
6:21PM ( 41 minutes ago )
Federal court rules against DeVos in for-profit fraud case
A federal court has ruled that it was "arbitrary and capricious" for Education Secretary Betsy DeVos to delay an Obama-era rule meant to protect students swindled by for-profit colleges
6:01PM ( 1 hour ago )
VW to stop making iconic Beetle next summer
Volkswagen says it will stop making its iconic Beetle in July of next year
5:36PM ( 1 hour ago )
AP Business
US stocks jump as inflation slows; tech rebounds
US stocks rise as Apple, Microsoft and Qualcomm lead a round of gains in technology companies and health care companies also move higher
4:45PM ( 2 hours ago )
US budget deficit hits $214.1 billion in August
US budget deficit hits $214.1 billion in August, reflecting calendar quirks
2:45PM ( 4 hours ago )
World stocks rise on report of US-China trade talks
Many global markets are higher following a report that the U.S. has proposed a new round of trade negotiations with China.
8:34AM ( 10 hours ago )
AP Business - Corporate News
AP Online - Georgia News
The Latest: Bill sent to Trump to avoid possible shutdown
Congress has approved a $147 billion package to fund the Energy Department, veterans' programs and the legislative branch
4:05PM ( 2 hours ago )
Congress hopes to OK spending deal, avert possible shutdown
As a potentially catastrophic hurricane takes aim at the Carolinas, Congress is trying to head off a legislative disaster that could lead to a partial government shutdown before the November election
2:50PM ( 4 hours ago )
Congress moving ahead on spending to avert shutdown
Congress is moving to avert a partial government shutdown as a major hurricane menaces the East Coast
12:36PM ( 6 hours ago )
AP Business - Economy
WHAT'S HAPPENING: Florence's rain bands lash Carolinas
Hurricane Florence is at the doorstep of North and South Carolina, and she's not going away anytime soon
1:23PM ( 5 hours ago )
US energy chief: sanctions possible on new Russia pipeline
The United States could impose sanctions on a new Russia-Germany gas pipeline, U.S. Energy Secretary Rick Perry said Thursday on a visit to Moscow.
12:52PM ( 6 hours ago )
The Latest: More than 1,000 flights canceled
A flight-tracking service says about 1,200 U.S. airline flights scheduled for Thursday or Friday have been canceled, with some airports in the Carolinas essentially shut down
12:26PM ( 6 hours ago )
AP Business - Industries
European Central Bank to take next step in tapering stimulus
The European Central Bank is phasing out its extraordinary stimulus efforts left over from the Great Recession and the eurozone debt crisis _ but doing it so gradually and predictably that markets are looking ahead to Thursday's meeting as no big deal
1:04AM ( 17 hours ago )
To prep for Hurricane Florence, investors sell off insurers
Ahead of Hurricane Florence, a frenzied sale of property insurers, investments in companies that sell construction supplies, portable generators
5:24PM ( 2 days ago )
US stock indexes rise as technology companies rebound
U.S. stocks rise as technology and consumer-focused companies recover more of their losses from the last week
2:57PM ( 2 days ago )
AP Business - Financial Services
Mets hit back-to-back homers in 9th, stun Marlins 4-3
Michael Conforto and Todd Frazier hit back-to-back homers with two outs in the ninth inning, and the New York Mets stunned the Miami Marlins 4-3 in the first game of a doubleheader
6:50PM ( 11 minutes ago )
Smart outraged by planned release of 1 of her kidnappers
Elizabeth Smart said Thursday the news that one of her kidnappers will be released next week was "a big shock," but while she urged authorities to reconsider the decision she also conceded there is no viable, legal recourse for her to pursue
6:44PM ( 18 minutes ago )
Uncle: Man killed by officer aspired to St. Lucia leadership
Friends and family have remembered a 26-year-old gunned down by a Dallas police officer as a deeply religious man who loved to sing and told his uncle that he might one day want to be prime minister of his native Caribbean island country of St. Lucia
6:44PM ( 18 minutes ago )
Emmy hosts Che, Jost ready for fun, politics, even mishaps
Emmy hosts Michael Che and Colin Jost aren't concerned about juggling fun and politics at next week's ceremony
6:37PM ( 24 minutes ago )
Panicked neighborhoods evacuate as gas blasts destroy homes
A series of gas explosions has caused fires in more than 20 homes across three communities north of Boston
6:34PM ( 28 minutes ago )