2018.02.2203:16:00UTC+00Fed’s Quarles Says Gradual Interest Rate Hikes ‘Appropriate’

Federal Reserve Governor Randal Quarles, one of the U.S. central bank's newest policymakers became the latest voice to join the majority of officials calling for interest rate hikes amid improving business optimism and accelerated growth in the economy.

In remarks addressing the Institute for International Monetary Affairs, Quarles said that he anticipates further gradual rate hikes in the policy rate will be appropriate in order to keep up with the strong labor market and steady inflation around the central bank's 2 percent objective.

He said that the U.S. economy seems to be on solid footing and is in the best shape that it has been in since the financial crisis, by many metrics since well before the crisis.

Market participants have all but weighed in another rate hike at the central bank's next meeting on March 20-21 and Fed officials have indicated they expect to announce two more rate hikes before the end of the year.

Quarles' comments underlined the general outlook at the central bank for a continuation under new Fed chief Jerome Powell of the slow monetary policy tightening that was started by his predecessor, Janet Yellen.

Taking note of the increase in business optimism, a rise in business investment and a strengthening labor market and a quickening rate of economic growth, Quarles said the underlying fundamentals of the U.S. economy are solid.