The president of the Federal Reserve Bank of Richmond says economic indicators suggest that short-term interest rates should be higher.
Waiting too long to raise that could pose problems for the economy, he believes. “The way the data is playing out, I think the longer we wait there is a material increase in risks that we run," Lacker told reporters Friday in Richmond after speech to Virginia economists.
The Fed Reserve reduced rates to nearly zero in December 2008 during the Great Recession. Rates didn’t change until last December when the Fed increased them a quarter of a percentage point.
That move was expected to be the first of four quarter-point increases this year, but those plans were derailed by the economy’s slow performance during the first half of the year.
