Raghuram Rajan says Fed move will prompt volatility

There will be volatility when the Federal Reserve increases interest rates, the Reserve Bank of India Governor said on Tuesday, arguing, however, that the consequences of inaction would be more severe.

"The liftoff has been one of the most widely advertised factors," Raghuram Rajan told an audience in Frankfurt.

"When it happens, there will be volatility. I worry more about the consequences of staying in the ultra accomodative ... world. I think there will be volatility but I think we have to bear it," he said.

(Reuters)