The Fed: Why a senior IMF official fears the Fed may at some point need to hike rates even with low inflation

Bloomberg News/Landov
Tobias Adrian, financial counselor and director of the monetary and capital markets at the International Monetary Fund speaks at a news conference last year.

The Federal Reserve might be forced to tighten monetary policy to address financial stability risks, a senior International Monetary Fund official told MarketWatch in an interview.

Tobias Adrian, the head of the financial market oversight division at the International Monetary Fund, said the recent tightening in financial conditions over the fourth quarter of last year was “too short-lived” to cause a meaningful reduction in the buildup of financial market vulnerabilities.

That has left medium term risks to financial stability broadly unchanged, the IMF said in its latest global financial stability report, which was overseen by Adrian.

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