Economic Report: New Study Finds Little Confidence in Fed’s Long Range Plans
As members of the Federal Reserve convene this week for a retreat in Jackson Hole, Wyoming, a new survey by CNBC says that many in the financial field are unsure if the Fed has a long-term monetary policy in place. In this week’s “Economic Report,” Dr. Rick Harper, who leads the University of West Florida Center for Research and Economic Opportunity, spoke with WUWF 88.1-FM’s Sandra Averhart about the Fed’s data-driven strategies when it comes to their strategic plan and decision to raise interest rates.
“This is all data-driven. I think if we see a strong August jobs report on the first Friday of September, I think we could very easily see a September, 25 basis points – one quarter of a percent – interest rate increase in short term rates by the Fed,” Harper said. “Clearly, interest rates have to get back to more normal levels. I was just looking at some information on Treasury bill yields – bills, bonds and notes – and the 10-year Treasury’s most recent weekly average was 1.56 percent. And when you expect inflation to be running at about 1.5 to two percent, that means that that 1.56 percent yield on the 10-year doesn’t even beat inflation.”
To listen the complete report, click here.