World economy ready for Fed rate hike, says RBA's Stevens: WSJ

August 16, 2016 12:40 PM EDT

Reserve Bank of Australia (RBA) Governor Glenn Stevens delivers a speech in Sydney July 26, 2011. REUTERS/Tim Wimborne/File photo

Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.

(Reuters) - The chief of Australia's central bank said the world is ready for the U.S. Federal Reserve to raise interest rates for a second time in this tightening cycle, according to an interview published online by the Wall Street Journal.

"I can't see why the global economy is really any less ready for No. 2 than it was for No. 1," Reserve Bank of Australia Governor Glenn Stevens was quoted as saying. "It's as ready as it has ever been in any of the other episodes."

The Fed raised rates from near-zero in December, its first policy tightening in nearly a decade, but it has since stood pat. U.S. policymakers mostly remain confident that another hike will come before year end.

Because of the U.S. central bank's reluctance to hike, countries like Australia have had trouble effectively easing monetary policy and boosting economic growth at home. The RBA cut its policy rate to record lows earlier this month.

Stevens added in the interview that domestic housing debt is significant, but that the slump in the sector would not trigger bank failures or trigger systemic risk.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories


Add Your Comment