Fed’s Quarles says uncertainty calls for gradual U.S. rate hikes

NEW YORK (Reuters) – Because it is unclear how long the U.S. economy can sustain its current strength, the Federal Reserve should continue with its gradual interest rate hikes until it becomes undeniable that a change of course is necessary, an influential Fed governor said on Thursday.

Randal Quarles, the U.S. central bank’s vice chair of supervision, who rarely discusses monetary policy, said he was optimistic about the economy’s prospects, and that calls for continued “stable, gradual, and predictable” policy tightening.

The Fed should “follow that course through the temporarily shifting and sometimes conflicting signs from the economy unless some strong and steady signal requires a firm but moderate correction,” he said at the Economic Club of New York.

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