Another Federal Reserve policymaker on Tuesday backed an emerging U.S. central bank plan to begin trimming its bond holdings later this year, as Kansas City Fed President Esther George warned against waiting too long in order to "overheat" labor markets.
The run-up in U.S. real estate prices could potentially amplify any future economic downturn, a Federal Reserve official said on Tuesday, urging regulators globally to consider tools beyond interest rates that could help cool the sector.
Republican lawmakers and the Federal Reserve may be ready to strike a compromise deal on legislation that would give Congress greater scrutiny over the central bank, now that there is no longer the threat of a presidential veto, but it would likely stop short of dictating rules on setting interest rates.
The Federal Reserve's second-in-command was the latest to wade into a post-election debate over what policies the new U.S. government should pursue, saying on Monday spending and other efforts to boost sluggish productivity could help reduce the Fed's burden of supporting the economy.
Only "significant negative news" could derail the Federal Reserve's high expectations for raising U.S. interest rates next month, a Fed official who has recently advocated for policy tightening said on Tuesday.
The Federal Reserve is raising expectations for an interest rate rise this year, even as early as next month, after two policymakers on Tuesday said the economic stars now appear to be aligning despite weak U.S. economic growth in the first half of 2016.
The Federal Reserve must approach further rate hikes cautiously and gradually because of lingering external risks to the U.S. economy, despite some strength at home and welcome hints of inflation, an influential Fed official said on Friday.