Despite weak inflation, Fed likely to raise interest rates

The Fed has kept rates at low levels since the financial crisis to stimulate economic activity

A speech by a Federal Reserve governor Tuesday underscored a basic shift in Fed policy: The central bank now needs to be convinced that quarterly rate increases are a bad idea.

After years in which any sign of economic weakness was reason enough for the Fed to maintain its stimulus campaign, the Fed is now willing to shrug off at least a little bad data. Lael Brainard, a Federal Reserve governor, told the New York Association for Business Economics that the Fed should raise its benchmark interest rate “soon,” despite new evidence that inflation remains below the level the Fed desires.

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