Fed is not a 'headwind' holding back economy, Clarida says

The Federal Reserve's recent interest-rate increases are not a "headwind" slowing the momentum of the economy, said Fed Vice Chairman Richard Clarida, on Monday. "The economy has good momentum going into 2019," even as the U.S. central bank has been gradually raising rates, Clarida said, in an interview on the Fox Business Network. President Donald Trump recently called the Fed the "biggest threat" to economic growth. The Fed vice chairman defended the December rate hike, calling it "appropriate," and said the federal funds rate is now only slightly higher than the inflation rate, historically a very low level of interest rates. Looking forward, the Fed "can afford to be very patient" on future interest rates moves, Clarida said. In particular, the Fed will be watching the slower global economy. So far, the impact from overseas is not severe on the domestic economy, he said.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.