Monetary policy

Low interest rates raise issues about financial stability and policymakers must take heed, Federal Reserve Bank of Boston President Eric Rosengren said Tuesday.

Federal Reserve officials need to show a commitment to reaching their goal on inflation, which has generally been running below target since the financial crisis, Chicago Fed President Charles Evans said.

Federal Reserve Bank of New York President William Dudley sounded a positive note on the U.S. economy, saying the central bank wanted to tighten monetary policy “very judiciously” to avoid derailing the expansion that began in mid-2009.

The Federal Reserve Board said it raised the discount rate to 1.75% from 1.5%, effective immediately.

President Donald Trump’s budget director said he expects the Federal Reserve to continue to run an easy monetary policy even as it unwinds the “unprecedented experiment” that swelled its balance sheet to $4.5 trillion.

Federal Reserve Board Chair Janet Yellen said she has had no conversations with President Trump about her future as Fed chair.

Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation.

The Federal Open Market Committee voted to raise the fed funds rate target 25 basis points to between 1% and 1.25%.

Federal Reserve officials surprised some onlookers by unveiling a rough plan for balance sheet runoff in the minutes for their May meeting. They were so on top of things, in fact, that many economists think more formal guidelines could come as early as this week.

Federal Reserve Bank of Dallas President Robert Kaplan is sticking to his outlook for two more interest-rate increases this year, even as he acknowledged recent declines in U.S. core inflation.

Most Federal Reserve officials judged “it would soon be appropriate” to tighten monetary policy again and backed a plan that would gradually shrink their $4.5 trillion balance sheet.

The June Federal Open Market Committee meeting should be live, Federal Reserve Bank of Philadelphia President Patrick Harker said.

Having a positive view of the economy, Federal Reserve Bank of Philadelphia President and CEO Patrick T. Harker said Friday he expects two more rate increases this year.

Federal Reserve Bank of Chicago President Charles Evans said his outlook hasn’t changed much.

The Federal Reserve is on track to begin unwinding its balance sheet this year or next, although U.S. central bankers are not in a rush to tighten and will take care to ensure their actions don’t trigger disruptions that harm the global economy, Federal Reserve Bank of New York President William Dudley said.

After the next rate hike, the Federal Reserve should consider “a very gradual normalization” of its balance sheet, Federal Reserve Bank of Boston President and CEO Eric S. Rosengren said Wednesday.

Tapering of the Federal Reserve’s balance sheet won’t sink the mortgage-backed securities market, said Boston Fed President Eric Rosengren, though prices may have to adjust.

The Federal Reserve should begin shrinking its balance sheet this year and put the reductions “on autopilot,” Federal Reserve Bank of Kansas City President and CEO Esther L. George said Tuesday.

If the economy grows as expected, further rate hikes will be necessary, although they should be gradual, not one every Federal Open Market Committee meeting, Federal Reserve Bank of Cleveland President and CEO Loretta J. Mester said Monday.

The fed funds rate target is not far from the appropriate level, given the low natural rate of interest, Federal Reserve Bank of St. Louis President James Bullard said Monday.