NEW YORK (Reuters) - The Federal Reserve should expect to continue raising interest rates “over the next year or so” even while it pays close attention to possible risks highlighted by financial markets, New York Fed President John Williams said on Tuesday when asked about so-called inversion in a bond yield curve.
“When I step back a bit I’m still of the view that with the economy on a very strong path with a lot of momentum, especially with some of the fiscal ... tailwinds and other factors, that further gradual increases over the next year or so still makes sense,” he said when asked whether the inverted two- and three-year Treasury yields could be a warning bell of an economic slowdown or recession.
“The timing of exactly when to adjust policy is something we’ll discuss and decide on,” he told reporters at the New York Fed.
“We pay close attention to areas where there may be some signs that the economy may slow faster than we may expect, or signs that some other risks are financially emerging or manifesting themselves. But my baseline forecast is still very positive.”
Reporting by Jonathan Spicer; Editing by Paul Simao