Guynn: Fed Rates Must Go Back to Neutral
JACKSON, Miss. (Reuters) - Low U.S. interest rates must be brought back to a more neutral level and if they stay down for too long financial market excesses can build, a top Federal Reserve (news - web sites) policy-maker said on Tuesday.
"We need to get rates to a more neutral level. That's as far as I am willing to take it. We (Fed funds rates) are at historic lows and we need to get back to a more neutral level," Federal Reserve Bank of Atlanta President Jack Guynn told a development forum.
"If you keep it (rates) too low for too long it can contribute to excesses. There can be unintended consequences of keeping it too low for too long," he said in answer to a question about whether low Fed rates were fueling excesses in the U.S. bond and stock market.
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