Federal Reserve Vice Chairman Richard Clarida indicated on Friday that the central bank could slow the pace of interest rate hikes next year.
“We’re at a point now where we really need to be especially data-dependent,” said Clarida in an interview with CNBC, adding that he wanted the Fed’s policy to be “neutral.”
Borrowing an analogy of moving slowly through a dark room from Fed Chairman Jerome Powell, Clarida said that he wants to be sure the economy doesn’t stub a figurative toe. Some Fed officials still favor two or three interest rate increases next year, but Clarida, an academic economist, wants to take a more wait-and-see approach,
“Right now there’s no clear signal that I would take from [markets],” said Clarida.
Pressed on whether the Fed rose rates too quickly – a criticism of President Trump’s – Clarida pushed back and defended the Fed’s decision making over the last several years, well before he joined the central bank’s board of governors in August. But he also said the Fed has moved past its need to raise rates from emergency levels brought on by the 2008 global financial crisis.
“The economy is going to be growing at a pace we haven’t seen in a decade,” said Clarida. “In terms of rates I think that it’s important to note that this process has been very gradual.”
