Interest rates are too low for the current US economy, Kansas City Fed President Esther George said Thursday.
She said she backs gradual rate hikes, adding that low rates can create economic risks. George votes on the US Federal Reserves policymaking committee and was the only member to vote for a rate hike at its April and March meetings.
I support a gradual adjustment of short-term interest rates toward a more normal level, but I view the current level as too low for todays economic conditions. The economy is at or near full employment, and inflation is close to the FOMCs target of 2 percent, yet short-term interest rates remain near historic lows, she said in prepared remarks to business leaders in New Mexico.
Her comments followed separate remarks Thursday from Boston Fed President Eric Rosengren and Cleveland Fed President Loretta Mester, who also vote on the Feds rate-setting committee. Rosengren said markets are underestimating the pace of potential hikes, while Mester added that uncertainty should not prevent the Fed from acting on policy changes.