The US Federal Reserve on Thursday continued to lay the groundwork for an interest rate increase in the next two months, with a senior policymaker saying the economy will likely be ready for such a move “fairly soon”.
Federal Reserve Governor Jerome Powell, a voting member of the US central bank's rate-setting committee, said in a speech in Washington that he felt the economy was on a "solid footing" and within reach of the Fed's inflation and employment goals.
But he added that the uncertainty surrounding Britain's June 23 referendum on whether to leave the European Union was an argument in favour of the Fed exercising “caution” as it ponders whether to raise rates at its June 14-15 policy meeting.
The Fed will hold another policy meeting on July 26-27.
Powell, however, struck an overall positive tone about the US economy in an appearance at the Peterson Institute for International Economics, becoming the latest Fed policymaker in recent days to say it may be time to notch rates higher.
The Fed's Washington-based Board of Governors has a decisive role in setting monetary policy, and its members have a permanent vote on the committee that sets the central bank's key federal funds rate.
Powell said he felt that data showing continued job creation and evidence of rising wages were a more important signal about the economy's direction than recent weakness in consumer spending and business investment.
"There are good reasons to think that underlying growth is stronger than these recent readings suggest," Powell said. "If incoming data support these expectations, I would see it as appropriate to continue to gradually raise the federal funds rate."
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Federal Reserve Governor Jerome Powell, a voting member of the US central bank's rate-setting committee, said in a speech in Washington that he felt the economy was on a "solid footing" and within reach of the Fed's inflation and employment goals.
But he added that the uncertainty surrounding Britain's June 23 referendum on whether to leave the European Union was an argument in favour of the Fed exercising “caution” as it ponders whether to raise rates at its June 14-15 policy meeting.
The Fed will hold another policy meeting on July 26-27.
Powell, however, struck an overall positive tone about the US economy in an appearance at the Peterson Institute for International Economics, becoming the latest Fed policymaker in recent days to say it may be time to notch rates higher.
The Fed's Washington-based Board of Governors has a decisive role in setting monetary policy, and its members have a permanent vote on the committee that sets the central bank's key federal funds rate.
Powell said he felt that data showing continued job creation and evidence of rising wages were a more important signal about the economy's direction than recent weakness in consumer spending and business investment.
"There are good reasons to think that underlying growth is stronger than these recent readings suggest," Powell said. "If incoming data support these expectations, I would see it as appropriate to continue to gradually raise the federal funds rate."
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