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Fed’S Hoenig: Rates Need To Rise

Friday, August 13, 2010 - 12:52 PM
Thomas Hoenig has been the lone dissenter this year in the FOMC. He continued his voting streak last Tuesday voting against the continued statement of "exceptionally low levels of the federal funds rate for an extended period". He also didn't agree with the with the reinvestments in longer-term securities.

This WSJ article reviews a speech Hoenig is giving today. According to the article:
Hoenig advocated raising the fed funds rate target from its current 0% level to 1%, taking stock of economic and market conditions, and then moving to 2%

This sounds quite reasonable to me now that the financial crisis that existed in late 2008 and early 2009 is long gone. In the last recession in the early 2000's, the Fed funds rate never dropped below 1%. So 1% to 2% is still quite low.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
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