Former Fed Governor Says Rate Hikes Won't Stop Until 'Some Heat Comes Out Of Labor Market'

Former Federal Reserve governor Randall Kroszner predicts further interest rate hikes linked to the robust labor market, reports CNBC.

Kroszner, currently an economics professor at the University of Chicago, who was instrumental in the response to the global financial crisis, believes the Fed won’t officially halt rate hikes until they “see some of the heat coming out of the labor market”.

Kroszner anticipates persistently high rates well into next year.

“I don’t see how they can be comfortable to say, ‘Okay we’re not going to be raising anymore’ if the labor market is as strong as it is now,” Kroszner stated on CNBC’s “Fast Money.”

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His remarks followed the Fed’s release of the minutes from its July policy meeting, which suggested that “upside risks” to inflation might necessitate further rate increases.

He also suggested that there could be disagreement among Fed members over the indicators required to take such an action. Kroszner highlighted consumer confidence, which the Fed is closely monitoring, especially as student loan repayments are set to restart this fall.

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