Federal Reserve policymakers signal no rush to raise US rates

LOUIS, July 14 Federal Reserve policymakers are largely in agreement with one another on their views on the outlook for interest rates and the economy, a top Fed official said on Thursday, pushing back against the idea of sharp divides at the US central bank.

And even Mr Lockhart, a non-voter this year at the Fed, on Thursday said it was possible the Fed could raise rates once, or even twice, this year, if data allowed it.

Since then, stocks have rallied to record highs as investors bet central banks will step up their efforts to support global growth, while incoming USA data has on balance been positive. "They indicated they would be more cautious in hiring and capital spending decisions as a result of Brexit".

The uncertainty around Brexit could cause problems for that struggling manufacturing sector, but he doesn't expect it to be a large factor, Harker said.

"I don't believe the (Federal Open Market Committee) is behind the curve in the setting of the policy rate".

Lockhart said he was not anxious about an outbreak of inflation from the current stance of policy.

Lockhart did not say how long it may take to get clarity, but his comments show the stark shift in expected policy that has taken place at the Fed since it raised rates in December for the first time in a decade.

Still, not everyone at the Fed has given up on the idea of raising rates.

Nor has there been any signal from other senior Fed officials to counter the perception that they'll stand pat this month to await more information before raising rates again.

Harker predicted 2 percent growth this year that will increase to roughly 2.3 percent in both 2017 and 2018, but he volatility in job growth could affect that.

While Lockhart told reporters it was conceivable the Fed could move on rates in the near term, there was reason for caution on the economic outlook.

"It's too early to sound the "all clear" as regards financial market stability", Lockhart told an economic summit in Idaho, according to his prepared remarks.

"Uncertainty that reduces business fixed investment activity is not helpful" in an economy already constrained by low business fixed investment, Lockhart said.

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