Fed Gov. Brainard says conditions point to continued, gradual fed funds rate hikes

Federal Reserve Board Gov. Lael Brainard told an economic club in New York Tuesday that continued, gradual increases in the federal funds rate will likely “remain appropriate to ensure inflation rises sustainably to our target and to sustain full employment.”

Brainard said interest rate normalization “is well under way and balance sheet runoff is set to reach its steady-state pace later this year.” But she said the Fed should be ready to adjust policy in either direction if developments don’t unfold as expected.

“In many respects, the macro environment today is the mirror image of the environment we confronted a couple of years ago,” Brainard said. “In the earlier period, strong headwinds sapped the momentum of the recovery and weighed down the path of policy. Today, with headwinds shifting to tailwinds, the reverse could hold true.”

Brainard was speaking before The Money Marketeers of New York University in New York, N.Y.

Speech by Fed Gov. Brainard

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