Rates Will Rise To Curtail "Spending Imbalances"
Donald Kohn, who sits on the board of governors at the Federal Reserve had this to say tonight. "We have not yet finished this task," he said in a video conference broadcast to an Australian Business Economists function in Sydney."
"The federal funds rate appears still to be below the level that we would expect to be consistent with the maintenance of stable inflation and full employment over the medium run."
"And if growth is sustained and inflation remains contained, we are likely to raise rates further at a measured pace," he said.
"Further Fed changes to interest rates should induce an increase in the personal savings rate, by increasing a return to saving and dampening the upward momentum in housing prices, Dr Kohn said."