The president of the Atlanta branch of the Federal Reserve has backed a fourth consecutive 0.75 percentage point rate rise at the next policy meeting in November, while urging the US central bank to be “mindful” of geopolitical and economic turbulence abroad.
The comments from Raphael Bostic come as the UK has become engulfed in a financial crisis after the government said it planned to implement £45bn of debt-funded tax cuts.
The announcement, which has drawn sharp criticism from the IMF and other prominent policymakers, prompted the Bank of England on Wednesday to intervene in the government bond market.
Bostic said the Fed needed to be “mindful” of international developments but added that the US economy and financial system were well fortified.
“The US economy still has a considerable amount of momentum,” he told reporters, adding that the US is less susceptible to “contagion” because of its economic strength.
That would bring the federal funds rate from its current level of 3 per cent to 3.25 per cent to a new target range of 4.25 per cent to 4.5 per cent.