Two Fed voting members signal hawkish tone for rate hike

Federal Reserve Presidents Rosengren and George, while speaking at two different events on Thursday, hinted that the Fed’s delay in hiking interest rate is susceptible in stoking an asset bubble soon. Their remarks paint a picture of consensus between the members of the Federal Reserve Open Market Committee (FOMC) ahead of the mid-June meeting.

"If the incoming economic data continue to be consistent with gradual improvement in labor markets and inflation getting closer to target, the Fed should be ready to gradually normalize interest rates," Bloomberg reported citing Rosengren in Cord, New Hampshire.

While Rosengren, a dove had in the past discerned the need for an easier monetary policy, George, a hawk, too agreed upon the need to hike rate, given the country’s extremely low interest rates in the present scenario. It thus, seems that the hawks and doves of the Fed are clinching together to arrive at a rate hike decision in the coming months.

"Interest-sensitive sectors can take on too much debt in response to low rates and grow quickly, then unwind in ways that are disruptive," George said at a business and community leaders’ luncheon in Albuquerque, New Mexico.

It now remains to be seen whether the June 14-15 meet in Washington will incorporate the Fed officials to raise decision for an interest rate hike.