City National bank CEO heralds Fed decision to raise rates
The Federal Reserve’s Dec. 16 decision to begin the long process of normalizing short-term interest rates got a thumbs up from one of Southern California’s most influential bankers.
City National Bank CEO Russell Goldsmith heralded the decision to raise the benchmark short-term rate to 25 basis points from zero — the first rate hike in seven years.
“People ought to see this as a positive sign that the economy has come back after many years of recovery,” he told the Business Times in a phone interview.
“The economy is in a self-sustaining recovery,” added Goldsmith, who was in Santa Barbara earlier in December for a reception hosted by the bank’s Montecito office. “The Fed move is a totally appropriate one that leaves interest rates extremely low and monetary policy accommodative.”
Goldsmith, who led City National into a merger with Canadian banking giant RBC that closed in November, said the first interest rate increase is not likely to be the last.
“The Fed will be able to start to move interest rates up over the next year or two to historical norms, gradually and carefully.”
Goldsmith said that while private sector job growth has varied from month to month, there has been “remarkably steady progress” in reducing unemployment and creating new positions in the private sector.
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