The Federal Reserve will probably keep benchmark interest rates low for "quite a while" even as it begins to raise them from their current level, according to a top Fed official.
Atlanta Fed President Dennis Lockhart said at a conference on the outlook for banking late last week that he expects the U.S central bank to begin raising rates in mid-2015 but to do so slowly.
"I think it's going to be a while before lift-off," Lockhart said. "I think we will be in this low interest rate environment for quite a while."
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The Fed has kept interest rates near zero since the onset of the Great Recession.
But the chief of the Kansas City Fed, Esther George, said at the same conference that it could be important to move toward a more normal rate "sooner rather than later" in order to avert any threat of future inflation.
Former Treasury Secretary Robert Rubin meanwhile said he isn't optimistic about U.S. growth prospects this year and criticized the Fed for its bond-buying program, known as quantitative easing or QE3.
In his keynote address to the University of Chicago Booth School of Business forum on monetary policy on Friday, Rubin said, "The real issue is, what were the risks and rewards of QE3? There's a widely held view that the benefits of QE3 have been relatively limited."
At the same time, he said, "these vast flows of capital have gone up the risk curve and created what may well have been excesses, that now as we know are tending to unravel — and that has a destabilizing effect."
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