President of Federal Reserve of Richmond Thomas Barkin said on Monday that the U.S. economy is prepared for increase in interest rates to control increasing inflation.
With the Federal Reserve set to start increasing rates March onwards, Barkin said that tighter monetary policy is right step.
“I’d like the Fed to get better positioned. I think we’ve got a good part of the year to get there. I think how fast we go just depends on how the economy develops.”
Financial markets are anticipating the central bank to move quickly.
Current futures pricing shows a high chances of at least five 0.25% increases in the short-term borrowing rate and there is a possibility of even seven increases according to predictions by some economists and institutions.
Currently inflation is running at highest level in last 40 years.
Barkin expressed that according to his experience the business community will welcome the increases in interest rate.
Barkin said, “As I talk to participants in the economy, what I hear is they actually want us to do something now about inflation. They’d like us to get back to at least a normal interest-rate posture and not be simulating more demand on top of normal levels. “So, I don’t hear much resistance to that.”