Xinhua
05 Aug 2021, 03:00 GMT+10
"I believe that these three necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022," U.S. Federal Reserve Vice Chair Richard Clarida said.
WASHINGTON, Aug. 4 (Xinhua) -- U.S. Federal Reserve Vice Chair Richard Clarida said Wednesday that the central bank is likely to hit its inflation and employment goals by the end of 2022 and start raising interest rates again in 2023.
"I believe that these three necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022," Clarida said in a webcast discussion hosted by the Peterson Institute for International Economics.
Clarida explained that annualized PCE (personal consumption expenditures) inflation since the new monetary policy framework was adopted in August 2020 is projected to average 2.6 percent through the end of 2022, with "upside" risks to higher inflation.
"My inflation projections for 2022 and 2023" would also satisfy the "on track to moderately exceed 2 percent for some time" threshold specified in the Fed policy statement, he argued.
Meanwhile, the U.S. labor market will have reached maximum employment by the end of 2022 when the unemployment rate is expected to fall to 3.8 percent, according to Clarida's projections.
"Commencing policy normalization in 2023 would, under these conditions, be entirely consistent with our new flexible average inflation targeting framework," he said.
Clarida also noted that the U.S. economy is expected to continue to move toward the Fed's standard of "substantial further progress," and the central bank will provide advance notice before making any changes to its asset purchases.
"If my baseline outlook does materialize, then I can certainly see supporting announcing a reduction in the pace of our purchases later this year," he said.
The Fed has pledged to keep its benchmark interest rate unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until "substantial further progress" has been made on employment and inflation.
Get a daily dose of New Jersey Telegraph news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to New Jersey Telegraph.
More InformationNEW YORK, New York -U.S. stock markets closed with broad gains on Thursday, led by strong performances in U.S. tech stocks, while European...
LONDON/STOCKHOLM: The Persson family is ramping up its investment in the H&M fashion empire, fueling renewed speculation about a potential...
PARIS, France: L'Oréal is making a fresh play in the booming premium haircare segment with a new acquisition. The French beauty conglomerate...
MENLO PARK, California: Robinhood is giving European investors a new way to tap into America's most prominent tech names — without...
NEW YORK, New York - U.S. stocks diverged on Wednesday for the second day in a row. The Standard and Poor's 500 hit a new all-time...
NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook...
GENEVA, Switzerland: A new United Nations report alleges that dozens of global corporations are profiting from and helping sustain...
LONDON, UK - Lawmakers in the United Kingdom have voted overwhelmingly to proscribe the direct-action group Palestine Action as a terrorist...
DHARAMSHALA, India: The Dalai Lama is set to address a significant three-day conference of Buddhist leaders this week, coinciding with...
WASHINGTON, D.C.: In a significant ruling last week, the U.S. Supreme Court upheld a Texas law requiring age verification for users...
ISTANBUL/PARIS/BRUSSELS: As searing temperatures blanket much of Europe, wildfires are erupting and evacuation orders are being issued...
VENICE, Italy: Over the weekend, hundreds of protesters marched through the narrow streets of Venice to voice their opposition to billionaire...