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MNI BRIEF: Hike Rates to Neutral, Then Evaluate - Fed's Barkin

(MNI) Washington
(MNI) Washington

Richmond Fed President looks for rates at neutral before discussing 'putting brakes on economy'.

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Richmond Fed President Thomas Barkin said Tuesday the Fed should decide whether to put the brakes on the economy after the fed funds rate has gotten in the neutral range of 2% to 3%.

"At 83 basis points, we are still far from the level of interest rates that constrains the economy; for my colleagues on the FOMC, this neutral rate is in the range of 2%-3%. And before the Great Recession, the economy handled rates even higher than that. Once we get in the range of the neutral rate, we can then determine whether inflation remains at a level that requires us to put the brakes on the economy or not," he said in remarks prepared for the Cecil County Chamber of Commerce.

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Richmond Fed President Thomas Barkin said Tuesday the Fed should decide whether to put the brakes on the economy after the fed funds rate has gotten in the neutral range of 2% to 3%.

"At 83 basis points, we are still far from the level of interest rates that constrains the economy; for my colleagues on the FOMC, this neutral rate is in the range of 2%-3%. And before the Great Recession, the economy handled rates even higher than that. Once we get in the range of the neutral rate, we can then determine whether inflation remains at a level that requires us to put the brakes on the economy or not," he said in remarks prepared for the Cecil County Chamber of Commerce.

Keep reading...Show less