A continued strengthening in US economic data could clear the way for a second increase in short-term interest rates “fairly soon,” a senior Federal Reserve policymaker has said, as speculation intensifies about the outcome of this summer’s rate-setting meetings.
Jerome Powell, a member of the Fed’s Board of Governors, said the US still faces a range of risks overseas, including the forthcoming referendum on Britain’s membership of the EU, uncertainties about China’s exchange rate policy, and “stubbornly low” growth and inflation for most US trading partners.
The vote in the UK could in particular be a factor favouring caution at the June 14-15 meeting, Mr Powell added.