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Fed’s Lacker sees need for interest rates moving higher

Bloomberg
Richmond Fed President Jeffrey Lacker

Interest rates will need to move higher unless employment growth “slows significantly” in coming months, said Richmond Fed President Jeffrey Lacker on Friday.

In a speech to two economist trade associations in Richmond, Lacker said that a well-known prescription for Fed policy, known as the Taylor Rule, is already signaling the need for higher rates.

The traditional Taylor rule recommended a 3.3% interest rate in the second quarter, “significantly higher” than the current 40 basis point fed funds rate, he said.

With the outlook for continued job growth and higher...


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