Fed talks up possibility of a rate rise within months
The Federal Reserve is raising expectations for an interest rate rise this year, even as early as next month, after two policymakers said yesterday said the economic stars now appear to be aligning despite weak US growth in the first half of 2016.
New York Fed President William Dudley, pictured, said "it's possible" to raise rates at the September policy meeting given evidence of wage gains and a tighter labour market that could boost inflation.
Dennis Lockhart of the Atlanta Fed said a hike next month is in play. The comments, which prompted investors to boost bets on a rate hike, came nine days before the annual meeting of some of the world's top central bankers in Jackson Hole, Wyoming, a venue the Fed often uses to telegraph policy plans. As June's shock UK vote to leave the European Union fades with little lasting effect on markets, the US economy is bouncing back from a meagre 1pc growth rate in the first six months of the year. Employment surged in June and July, while new data shows solid gains in industrial output and home building in the world's largest economy.
"We're edging closer towards the point where it will be appropriate to raise interest rates further," Mr Dudley said. (Reuters)