September 28, 2017 / 2:49 PM / 2 years ago

KC Fed's George says rate hike best way to ensure recovery is sustained

FILE PHOTO - Kansas City Federal Reserve Bank President Esther George is pictured in the bank's boardroom in this handout photo courtesy of the Kansas City Federal Reserve. Courtesy Kansas City Federal Reserve/Handout via REUTERS

KANSAS CITY (Reuters) - Continued interest rate increases are the best way to ensure the current economic recovery remains steady and sustained for perhaps years ahead, Kansas City Fed President Esther George said on Thursday.

“You have elevated levels of confidence and around the world you see bright outlooks for growth,” George said at a minority banker’s conference here. “That suggests that the economy will continue to grow over the next few years with low employment and low inflation.”

“Further gradual adjustment in short-term interest rates based on an economy growing above trend ... will be important if we want to continue this long expansion,” she said.

George is not a voter on interest rate policy this year but has staked out a more cautious approach to inflation and financial stability, arguing the Fed needs to raise rates before problems develop.

Reporting by Howard Schneider; Editing by Meredith Mazzilli

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