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          Are US Central Bank Officials Signaling Imminent Rate Hike?

   by Mil Arcega

   Members of the U.S. Federal Reserve may be bracing financial markets
   for a possible rate hike, and the indications are it could happen
   soon.

   The Fed's benchmark rate, or the rate it charges banks on short-term
   loans, has been near record lows since the end of the financial crisis.
   With the U.S. economy showing signs of improvement, though, the odds of
   a rate hike -- the first since December of last year -- are rising.

   More Americans have been working or looking for work, and corporate
   profits are on the rise.

   Speaking at the Peterson Institute in Washington, the Federal Reserve's
   Jerome Powell said the implications for monetary policy were clear.

   "If incoming data continue to support those expectations, I would see
   it as appropriate to continue to gradually raise the federal funds
   rate," said Powell. "Depending on the incoming data and the evolving
   risks, another rate increase may be appropriate fairly soon."

   Earlier in the week, Dallas Fed President Robert Kaplan said he
   expected at least two rate hikes in 2016. And Friday, Federal Reserve
   Chair Janet Yellen said the Fed was monitoring economic data, but she
   expressed confidence about the U.S. recovery.

   "It's appropriate, and I've said this in the past, for the Fed to
   gradually and cautiously increase our overnight interest rate over
   time, and probably in the coming months such a move would be
   appropriate," said Yellen.

   The last rate hike was six months ago. Since then, slower growth around
   the world and increased market volatility have delayed moves to
   "tighten" or "normalize" US monetary policy.

   Time is short

   On Skype, Bankrate.com's chief analyst, Greg McBride, said the Fed was
   running out of excuses, and time.

   "If they don't set the table for a move in June or July, you can kiss
   two interest rate hikes in 2016 goodbye," he said.

   Economists say interest rates are still the strongest tool available to
   central banks when the economy sours. Even investors who have benefited
   from lower borrowing costs may be coming around, according to portfolio
   manager Brad Friedlander.

   "I think you're beginning to see a wake-up call among a set of
   investors that have been largely complacent about the idea of implicit
   dovishness [opposition to higher rates] coming from the Fed, and I
   think with the Fed's confidence comes market confidence as well," said
   Friedlander.

   "You don't want to wait too long, but neither do you want to be in a
   hurry," said the Fed's Powell, who denied there's a coordinated effort
   by central bank officials to signal a rate increase.

   Their next vote comes June 15.
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   [1]http://www.voanews.com/content/us-central-bank-official-signal-immin
   ent-rate-hike/3349401.html

References

   1. http://www.voanews.com/content/us-central-bank-official-signal-imminent-rate-hike/3349401.html