WASHINGTON (Reuters) - Federal Reserve Governor Jerome Powell said on Thursday the gap between the U.S. central bank’s projections for interest rate rises over the next thee years and those of financial markets, which predict fewer, is less than many assume.
“It’s something that needless to say that everyone pays attention to but I do think you have to take those differentials with a grain of salt,” Powell said at an Institute for International Finance event in Washington on the sidelines of the IMF and World Bank semi-annual meetings.
Powell said it was difficult to accurately determine expectations in financial market pricing because term premia affect those rates.
When term premia is taken into account the difference between the two sets of predictions is much smaller, Powell said.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama