US economy on verge of meeting conditions for another rate hike, Fed´s Rosengren says
Rosengren: Fed has set low threshhold for growth
Rosengren: Hiring well above rate needed for gradual tightening of jobs market
Policymakers still split about June rate hike - FT
The US economy was on the cusp of meeting most of the conditions set out by the country´s central bankers to tighten monetary policy again, a top official said over the weekend.
In an interview with the Financial Times published on Monday, the president of the Federal Reserve bank of Boston, Eric Rosengren, said he saw the pre-conditions for a 25 basis point interest rate hike at their 14-15 June meeting falling into place.
"I want to be sensitive to how the data comes in, but I would say that most of the conditions that were laid out in the minutes, as of right now, seem to [....] on the verge of broadly being met," Rosengren said.
Minutes of the Fed´s last policy meeting, held in late April, showed policymakers had set itself three conditions which needed to be met for a move in June: further signs of an economic rebound in the second quarter, further jobs market strength and inflation carrying on towards the central bank´s 2% target, the FT reported.
Nonetheless, policymakers in Washington were split about whether those tests would be met by the time of the June meeting, according to the newspaper.
Rosengren was a voting member of the Federal Open Market Committee in 2016.
Remarks from Rosengren on 12 May had led markets to begin revising the odds they assigned to a June move by the Fed sharply higher.
That was because up until then his views had typically been on the more dovish side of policy views and, significantly, because of the fact he held a vote on this year´s FOMC.
The Boston Fed chief also told the FT that the US central bank had set a "relatively low threshhold" for an improvement in the rate of economic growth and that hiring in the labour market continued to be "well above" what was needed to achieve a gradual tightening of the labour market.
Higher prices for oil and a weaker US dollar also meant progress was being made on getting the rate of inflation back to 2%.
As of 12:47 BST the yield on the benchmark 10-year US Treasury note was sliping by one basis point to 1.83%.
Fed funds futures were assigning a probability of 26.3% to a 25 basis point rate hike by the FOMC at its 15 June meeting, according to the Chicago Mercantile Exchange´s Fed Watch tool.
The odds of a rate hike by the 27 July meeting were at 52.6%.