Global uncertainty changed timing of Fed rate hike: ECB's Liikanen

HELSINKI (Reuters) - Global economic uncertainties might have impacted the timing of a U.S. interest rate rise but the market continues to expect the Fed to act, European Central Bank council member Erkki Liikanen said on Saturday.

The U.S. Federal Reserve left rates unchanged at near-zero levels on Thursday, postponing a widely expected hike due to "less certain" global economic outlook.

"There has been uncertainty globally which perhaps has an impact on timing, but surely the market expects the Fed to act sooner or later," Liikanen said in an interview with public broadcaster YLE.

Asked about why the Fed was pressured to increase rates, Liikanen noted that the U.S. economy had strengthened consistently for some time.

"Unemployment has declined and the number of open work positions has increased. In a certain time frame, when capacity becomes fully utilized, acceleration of inflation is obvious," he said.

"Because of this, central banks usually aim to act beforehand."

(Reporting by Jussi Rosendahl; Editing by Clelia Oziel)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Singapore core inflation at 2.0% year-on-year in July, lower than expected
• Shein to pay up to $3.5 billion to select pre-IPO investors around Hong Kong listing
• New Zealand to introduce bill banning social media for children under 16