Fed could return to zero rates after a June hike

Federal Reserve official Jeffrey Lacker on Friday repeated his call for the central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it. "If we were to raise rates, and then subsequently reduce them to zero, it might be unexpected, but presumably we’re setting rates where we ought to be, I don’t see it as problematic to reduce rates having raised them once." Lacker's call for a June hike comes amid a weak patch in economic data, including a dismal March jobs report, which was less than half February's pace and the smallest gain since December 2013. It also comes as the soaring dollar and falling oil prices have held back inflation measures. But Lacker cited a plunge in the unemployment rate and strong consumer spending as signs the Fed needed to move ahead with its plans to hike. "I think there is good reason to believe that some of the recent weakness in indicators as transitory, I think we need to take a longer view. We need to look through that in setting interest rate policy," (VIEW LINK)

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