PHILADELPHIA The Federal Reserve will likely raise interest rates two or three times this year, another top Fed official said on Monday, reinforcing the central bank's message it is getting ready to act now that the U.S. economy has recovered from a weak winter.
In a repetition of remarks made in recent months, Philadelphia Fed President Patrick Harker said he expects U.S. rates to move "meaningfully" away from near zero in the second half of 2016.
The Fed raised rates to 0.25-0.5 percent in December and has since stood pat. But after a flurry of confident-sounding speeches by Fed officials over the last week, and a continuation of stronger economic data, both the central bank and financial markets now expect a second hike in June or July.
"There will likely be two or perhaps even three rate hikes over the course of the year," Harker, a relatively new addition to the Fed who does not have a vote on policy this year, told the Bond Club of Philadelphia.
He did not specifically mention action at the mid-June or late-July Fed policy meetings.
Harker repeated his expectation that inflation will rise to a 2-percent target by some time next year, and he predicted U.S. economic growth for the rest of the year should be "meaningfully more upbeat" than the 0.5 percent logged in the first quarter.
(Reporting by Jonathan Spicer; Editing by Diane Craft)
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Updated Date: May 24, 2016 05:00 AM