Short-term interest rates might rise again, Fed officials signal in contrast to Yellen

Three officials indicated openness to increasing rates before year end
September 23, 2017 12:00PM

Federal Reserve Chairwoman Janet Yellen’s comments earlier this week forecast steady interest rates, but three Fed officials remarked otherwise Friday. (Pixabay / Federal Reserve Flickr)

On Friday, three Federal Reserve officials indicated they’d be open to increasing short-term interest rates before year end. Interest rates affect mortgage and cap rates, which in turn affects property prices.

Federal Reserve Bank of Dallas President Robert Kaplan, Kansas City Fed President Esther George and San Francisco Fed President John Williams all made comments ranging from being open to increasing rates to supporting gradual rises, according to the Wall Street Journal.

The three officials’ comments come after a two-day meeting earlier this week, after which the only public statements — until yesterday — were given by Chairwoman Janet Yellen.

“The basic message here is U.S. economic performance has been good,” she said in a press conference, noting that the Fed’s “anticipated rate path” would reflect their optimistic view of the economy with low unemployment, restrained inflation and moderate growth.

The Real Deal reported Yellen’s comments indicated steady rates for the rest of 2017, in contrast with 12 out of 16 officials who expected rates to rise. The three officials’ public statements on Friday may forecast the Fed’s eventual decision, which would be made at the policymakers’ December meeting.

[Wall Street Journal] — E.K. Hudson