Skip to main content

The Federal Reserve will likely gradually raise interest rates three or four times in total this year and could aim to eventually raise the policy rate to about 3 percent, New York Fed President William Dudley said in a television interview on Monday.

“The markets are seeing that three is possible, four is possible, but five or six seems to me is quite unlikely,” Dudley, an influential outgoing Fed policymaker, said on CNBC. He added: “Three percent is a reasonable starting point in terms of thinking about what ‘neutral’ might be over the long run.”

The Fed hiked rates last month and forecasts showed policymakers split on whether to tighten two or three more times this year. The forecasts also showed the Fed expects inflation to rise above a 2 percent target next year, after more than five years below it.

Story continues below advertisement

“I don’t think we know exactly how many more hikes we’ll do this year,” Dudley added. “As long as inflation is relatively low, we’re going to be gradual. Now if inflation were to go above 2 percent by an appreciable margin then I think the gradual path might have to be altered.”

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Cannabis pro newsletter