Fed's Williams sees further rate rises

Omkar Godbole FXStreet Contributor

Comments from Fed's John Williams crossing the wires via BBC-

A rate rise in December "makes sense, at least based on the information I have today.
Due to fundamental shifts in demographics and slower growth, the new normal for interest rates is likely to be much lower in the future than in the past.
I think this is going to be the big challenge for us going forward - how to operate monetary policy effectively when the normal or average interest rate is 2.5 to 3%.
During a recession, the typical response of a central bank like the Fed would be to cut interest rates by five percentage points to stimulate the economy.
Well, if you're starting from 2.5 or 3%, you obviously don't have as much maneuvering room to give the economy a boost.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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