washington<u+2014>federal reserve governor daniel tarullo on tuesday<u+00a0>said the central bank should still proceed cautiously as it decides whether to lift interest rates despite stronger recent data. the fed<u+2019>s regulatory point man said that while data over the last several months has shown actual inflation rising , moderately higher wage growth, and slightly higher labor-force participation than had been expected, the central bank should continue to proceed slowly in lifting rates . the fed is scheduled to hold its next meeting of the policy setting federal open market committee on<u+00a0>dec. 13-14. <u+201c>the discussion of when is the appropriate moment for raising rates in order to prevent the economy from overheating too much -- is now from my point of view -- more on the table than it may have been before,<u+201d> mr. tarullo said at the wall street journal<u+2019>s ceo council . grounds for caution, he said, include the continued slack in the labor market and the concern that the central bank has <u+201c>fewer tools<u+201d> to respond to a recession. <u+201c>there are reasons to be cautious in moving forward,<u+201d> said mr. tarullo. <u+201c>we obviously don<u+2019>t want to be pushing on the brakes harder than we need to in order to continue the trend of moderate growth.<u+201d> separately, mr. tarullo said<u+00a0>ongoing discussions by the basel committee on banking supervision to finalize a capital framework by the end of the year will have a <u+201c>negligible<u+201d> effect on the largest, most-complex u.s. banks. he said revisions to the capital rules now being negotiated won<u+2019>t be <u+201c>particularly significant<u+201d> for u.s. banks. still, he stressed the necessity for establishing minimum capital levels for global banks that aren't based on internal models to ensure stability. looking ahead to the post-election landscape, mr. tarullo declined to speculate on the outcome of pledges president-elect donald trump made on the campaign trail to dismantle the 2010 dodd-frank financial-regulatory law. <u+201c>if changes are made, we will implement faithfully to the changes that congress makes,<u+201d> said mr. tarullo. mr. tarullo said any changes made by congress should be data-driven. he said the fed has applied similar thinking in making changes to its annual stress test exercise. mr. tarullo suggested he<u+2019>s not planning to leave the fed following the election of mr. trump, saying he<u+2019>s engaged and enjoying his job. his term expires<u+00a0>in 2022. write to donna borak at donna.borak@wsj.com
fed governor tarullo sees reasons for caution in lifting interest rates  - wsj
donna borak