Federal Reserve Chair Janet Yellen mentioned the U.S. central bank is close to lifting interest rates as the economy continues to create jobs at a healthy clip and inflation inches higher.
A rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Yellen will be addressing this before the Congress’s Joint Economic Committee.
Yellen also mentioned President – elecet Donald Trump mentions it would be a gradual increase. The article goes into more detail on this matter.
“Yellen’s testimony ignored the very real possibility of substantial fiscal stimulus next year,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., said in a note. She “does not want the Fed to become even more of a political punch bag than it is already.”
Risks of Delay
The Fed chair warned of the risks attached to waiting too long before raising rates.
“The risk of falling behind the curve in the near future appears limited,” she said.
At their most recent meeting earlier this month, Fed officials left the target range for the benchmark federal funds rate at 0.25 percent to 0.5 percent — where it’s been since December — and said the case for raising rates had “continued to strengthen.”
As of the recent report, it is expected that December will have a rate hike barring a significant shock in job s numbers or in financial markets.
While the recent pace of jobs gains “cannot continue indefinitely,” Yellen said she still saw room for further strengthening of the labor market.