U.S. Markets

Case for rate hike 'clearly strengthened' this month: Fed's Powell

Federal Reserve Governor Jerome Powell delivers remarks during a conference at the Brookings Institution in Washington August 3, 2015. REUTERS/Carlos Barria

(Reuters) - The case for raising U.S. interest rates has “clearly strengthened” since early November, before Americans elected Republican Donald Trump as president, a Federal Reserve governor said on Tuesday in the latest signal that a policy tightening is imminent.

In an upbeat speech on the U.S. economy’s prospects, Fed Governor Jerome Powell said that while the central bank has so far been wise to be patient on policy, moving too slowly as inflation continues to rise could leave it scrambling.

“Incoming data show an economy that is growing at a healthy pace, with solid payroll job gains and inflation gradually moving up to 2 percent,” Powell said in his first public comments on policy since the Nov. 8 election.

“In my view, the case for an increase in the federal funds rate has clearly strengthened since our previous meeting earlier this month,” he said of the Fed’s Nov. 1-2 decision to leave rates steady at 0.25-0.5 percent, where they have been since last December.

Reporting by Jonathan Spicer; Editing by Meredith Mazzilli