Saturday 24 September 2016

ECB’s Constancio Says a Fed Rate Rise Would Reassure

In World Economy News 23/09/2016

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European Central Bank Vice President Vitor Constancio said he is looking forward to a possible interest-rate increase by the U.S. Federal Reserve in December, a move he said would be “very reassuring” for the world economy.
The Fed left its policy rate unchanged at a meeting this week to await more evidence of progress toward its economic goals. Three Fed officials dissented in favor of a quarter-point hike.
“If indeed the Fed feels confident enough, say, in December, to raise rates,” that would prove that central banks can achieve their goals, and that it is possible to normalize inflation over time, Mr. Constancio said at an academic conference at the ECB’s headquarters.
“And that will be very reassuring and I hope, if and when that comes, it will lift animal spirits everywhere,” Mr. Constancio said. “We are looking forward to that one.”
Back in January, ECB President Mario Draghi praised the Fed’s decision to raise rates the previous month, and said major central banks would pursue divergent policies for some time.
Since then, the Fed has been on hold amid risks from abroad and inconsistent signs of economic recovery.


Source: Dow Jones