Originally created 05/27/05

Fed's Gramlich: more measured rate hikes "possible"

PARIS - Federal Reserve Governor Edward Gramlich said Thursday that measured increases in U.S. interest rates could continue.

"Further rate hikes at a measured pace are possible," he said.

Gramlich, who is stepping down as a member of the Fed Board in August, was speaking on the sidelines of a conference in Paris. His remarks echo recent statements by other Fed policy makers suggesting the central bank will continue to raise the key federal funds rate this year.

The Fed increased rates to 3 percent earlier this month, its eighth rate hike since mid-2004.

Gramlich also said the outlook for the economy is stable.

"If we were going through a soft patch, we are through it," he said. "It looks like the inflation numbers are reasonably well-behaved and output numbers reasonably robust."

He said rising oil prices may have reduced demand "a little bit," but weren't exerting as negative an influence as they did in the 1970s. Oil prices, he added, haven't had much impact on other prices.


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