2 Fed presidents play down chance of two rate hikes this year

Jackson Hole-Wyoming (Aug 29)  Two Fed officials have played down the likelihood of two rate increases this year beginning as soon as next month, after the U.S. central bank’s second-in-command floated the idea on the sidelines of the Kansas City Fed’s research conference.

Vice Chairman Stanley Fischer told CNBC on Friday that Fed Chairwoman Janet Yellen’s Jackson Hole speech, in which she said the case for a rate increase has strengthened, was consistent with the central bank potentially raising rates at its meeting next month and again before the end of the year, if data shows the economy performing well.

In interviews with the Wall Street Journal early Saturday, however, two regional Federal Reserve bank presidents distanced themselves from the idea of two rate increases this year.

“The calendar would allow that, we have three more meetings,” Federal Reserve Bank of Atlanta President Dennis Lockhart said, although he added “I wouldn’t take [Fisher’s] position today.”

Meanwhile, Lockhart’s counterpart at the St. Louis Fed, James Bullard, reiterated that he is “agnostic” about the timing of the next rate increase, but he said two rate increases this year wouldn’t fit with his forecasts.

Source: Reuters