April 15, 2011 / 6:50 PM / 9 years ago

Fed's Hoenig: rate hikes should be soon and small

WEST LAFAYETTE, Ind (Reuters) - The U.S. Federal Reserve should not wait too long before raising benchmark interest rates, and should not raise them too fast, one of the Fed’s most consistent hawks said on Friday.

Doing so could force businesses and consumers to make sudden adjustments in behavior that could tip the economy back into recession, Kansas City Fed President Thomas Hoenig told an audience at Purdue University.

“There are two things: the size of the adjustment will be a factor, and the duration before we introduce the adjustment will be a factor,” Hoenig said. “I think the smaller, the sooner, then you get expectations generated and you get people thinking, ‘I’d better match my assets and liabilities because if I don’t I’m going to find myself in trouble.’”

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below