Time for U.S. to Raise Rates — Fed’s George

That framework is already in disarray, leaving investors and the general public guessing about how the Fed plans to manage the economy.

George spoke to FOX Business ahead of hosting the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. In a constantly changing economic environment, the Fed can not promise to act according to a pre-set calendar. The Fed’s five-member Board of Governors, which has the final say, kept the rate unchanged. The Fed raised rates for the first time in more than nine years in December.

“Federal Reserve Bank directors generally indicated that economic activity had continued to expand at a moderate pace”, the July discount-rate minutes showed.

“The case is strengthening” for a rate hike, Dallas Fed President Robert Kaplan said on CNBC TV. The best response is to keep rates low now, so the economy will be as resilient as possible when any new shock hits.

Federal Reserve Board (FRB) officials are beset with fears they lack the policy tools to combat future cyclical shocks to the US economy, an issue expected to be debated at the annual Jackson Hole summit later this week. It then tests out the Fed’s various tools – from the policy rate, quantitative easing (QE), to forward guidance – to see if they succeed in getting the economy back on track. In other words, they are likely to continue lowering both their 2018 and longer-run projections for the federal funds rate. He said being specific about the timing of rate increases has proven to be counterproductive. Why not let it do so by holding off on rate increases?

While the presidential election is a focus for much of the business world, it shouldn’t affect the Fed’s policy-making decisions, George noted.

Fed Chair Janet Yellen will kick off events with the conference opening speech Friday morning.

New York’s William Dudley is the only voting president from that group.