US interest rates are likely to rise next month: Fed policymaker

US interest rates are likely to rise again next month and a further three times next year, one of the Federal Reserve's rate-setters has said.

John Williams, who sits on the Fed’s Open Markets Committee, said a rate rise in December “makes sense, at least based on the information I have today”.

He also told the BBC he was “pencilling in” three further increases next year, as interest rates returned gradually to “a normal level” of about 2.5%.

“Due to fundamental shifts in demographics and slower growth,” he said, “the new normal for interest rates is likely to be much lower in the future than in the past.”

Mr William added: “I think this is going to be the big challenge for us going forward – how to operate monetary policy effectively when the normal or average interest rate is 2.5 to 3%.

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First report on BBC News: Fed policymaker sees further rate rises.

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