The Federal Reserve will continue its approach of gradual increases in the interest rate to support economic expansion and hold back inflation, according to Federal Reserve Bank of New York President John Williams, Bloomberg reported.
“We’ll be likely raising interest rates somewhat but it’s really in the context of a very strong economy,” Williams said at a community event in New York. “We’re not on a preset course. We’ll adjust how we do monetary policy to do our best to keep this economy going strong with low inflation.”
The benchmark policy rate is currently in a 2% to 2.25% range, with a move next month still on the table, according to the report.
“We’re going to do what we’ve been doing, as best we can. We’re going to find a – currently we say – ‘gradual path’ of getting monetary policy back to more normal levels,” Williams said.
“We’re in a great position,” he said. “Unemployment is very low, the economy has got a lot of, I think good, positive signs and for us, it’s just keeping a good balance – keeping this economy strong and stable.”
Inflation is at the Fed’s 2% goal given the unemployment level at its lowest since 1969, according to Bloomberg. Meanwhile, economic growth came in at a 3.5% annual pace in the third quarter.
While the Fed is expected to increase the short-term benchmark rate in December, Bloomberg said chances of a change have slimmed in recent days given indications that the housing market has cooled.