Kansas City Fed chair supports slowing rate hikes

By Ovunc Kutlu

ANKARA (AA) - Kansas City Fed President Esther George said Thursday she supports the Federal Reserve slowing the pace of rate hikes.

"A more measured approached to rate increases may be particularly useful as policymakers judge the economy’s response to higher rates," she said at a conference in Houston, Texas.

The Fed has raised its benchmark interest rate by a total of 375 basis points, or 3.75%, since March to get control of runaway inflation, while it made hikes of 75 basis points in four consecutive meetings.

George had voted for a hike of 50 basis points. before the first hike of 75 basis points on June 15, the biggest single increase in 28 years. The Fed dissenter said days later that the increase creates uncertainty.

George said Thursday that the degree of monetary tightening that is necessary will only be determined by observing the dynamics of the economy and inflation.

"As the tightening cycle continues, now is a particularly important time to avoid unduly contributing to financial market volatility, especially as volatility stresses market liquidity with the potential to complicate balance sheet run-off plans," she said.