US lending rates ‘likely to remain appropriate’: Fed’s Clarida

Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day "Challenges for Monetary Policy" conference in Jackson Hole. (File photo: Reuters)

Benchmark US interest rates are in a good place and this is not likely to change soon, the US Federal Reserve’s number two official said Friday.

Richard Clarida, vice chairman of the Fed’s board of governors, spoke two days after the central bank cut interest rates for the third time in a row to protect the economy from slowing growth and trade frictions.

“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook,” Clarida said in prepared remarks.

He noted that the effects of Fed policy changes occur with a lag, meaning the boost from recent rate cuts “will be realized over time.”

Clarida’s remarks echoed those of Fed Chairman Jerome Powell, who signaled Wednesday the Fed did not expect to cut rates again soon.

Economic data this week have been surprisingly strong, helping assuage fears of a sharper slowdown in the United States.

Clarida also said the Fed was prepared to step in, should the picture deteriorate.

“Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly,” he said.

Clarida was echoed Friday by Fed Vice Chairman Randal Quarles, who delivered a speech saying he expected the economy will “remain in a good place.”

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Last Update: 17:56 KSA 20:56 - GMT 17:56
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