Fed’s Plosser Optimistic on Economy, Rate Hike

Former Philadelphia Federal Reserve President Charles Plosser thinks the Fed will “probably” raise rates tomorrow.

“They’ve set a pretty strong signal, it would be pretty awkward for them to back out of it now -- although they have surprised us in the past and they tend to get cold feet sometimes,” he said during an interview on the FOX Business Network’s Mornings with Maria.

Although Plosser is concerned about China, the Middle East, oil and commodities, he’s optimistic on the economy.

“I don’t think there is anything looming on the horizon that’s so devastating that the economy can’t handle it,” he said.

Plosser also discussed how low gasoline prices are a “net positive” for the economy

“Consumers have been spending rather well over the last year or so… I think that the consumer is actually the strength of the economy right now,” he said.

He also expects two and a half to three percent growth in 2016.

“I think the economy is doing pretty well. We shouldn’t expect a lot more… there are always risks. But I think the forecast is pretty solid -- the U.S. is on pretty good fundamentals right now.”

When asked whether there could be three or four more interest-rate hikes in the new year he said: “The Committee said it’s going to be data dependent… They want to go gradually but will they be able to? That will depend on the economy.”