Fed Officials Tout Strong Economy, Gradual Hikes

A host of FederalReserve speakers expressed optimism toward the fundamentals of the U.S. economy Tuesday, as markets anticipate higher interest rates in the coming months. Recent signs that U.S. inflation is accelerating give the Federal Reserve a good reason to raise interest rates, Richmond Fed President Jeffrey Lacker said. Consumer prices outside food and energy have risen more quickly in recent months, gaining 1.7 percent in the 12 months through February, which was already higher than the median forecast for 2016 given by Fed policymakers last month. This has made “a persuasive case for increasing the target range for the federal funds rate,” Lacker said in prepared remarks before college students in North Carolina. Lacker, who appears to be in a small minority of Fed policymakers pressing firmly for a resumption in gradual interest rate hikes, argued that firming labor markets and consumer spending would continue to power economic growth and that the tumult in global financial markets earlier in the year did little to slow the economy.

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