Fed's Stern sees no reason to end tightening- paper
Mon Jun 20, 2005 04:36 AM ET
TOKYO, June 20 (Reuters) - Federal Reserve Bank of Minneapolis President Gary Stern sees no reason for the Federal Reserve to stop raising interest rates now as the economy expands at a desirable pace, a Japanese newspaper reported on Monday.
The Fed's target for the federal funds rate, the rate at which banks lend overnight money to each other, remained low despite a year-long credit-tightening campaign that has brought it up to 3.0 percent from 1.0 percent, the Nihon Keizai Shimbun quoted Stern as saying in an interview.
"We do not see any factors at this point to stop monetary tightening," the Japanese-language newspaper quoted the regional Fed chief as saying. "It's appropriate to raise rates at a measured pace, although we can't say to what level."
The newspaper said Stern's comments underscored expectations that the U.S. central bank would raise interest rates by another quarter percentage point when its Federal Open Market Committee meets next week.
Stern said oil prices had risen more than he had expected but added that their economic impact was smaller than two or three decades ago.
