The Fed will continue to raise rates and will carry out 3 increases in 2018, says Dallas President Robert Keplen.
According to him, the volatility of the market could not change the basic scenario, although it made me think about the effect on the economy.
“At the moment, I do not see the market adjustment influencing the financial conditions,” he continued.
Last year, the central bank carried out three rate hikes.
This month, there was a sale of shares, because of fears that wage inflation could force the Fed to tighten monetary policy faster. However, the markets recovered in the last couple of days.
According to Kepplen, the termination of the stimulating policy will be gradual.
Strong growth and low employment are key arguments for tightening monetary policy. Unemployment can fall to less than 4%, which is below the full-employment mark, says Keplen.
In general, growth is likely to peak this year, and in 2019 and 2020 will slow down, he predicts.
“2018 will be a solid year for the United States. We are approaching the full-employment mark, and unemployment may fall below 4% this year, “Kepplen concludes.