Yellen’s also predicted that markets would gradually soon move toward the Fed target of two per cent inflation, but still refrained from naming a date for the next rate hike [XInhua]
US Federal Reserve Chairwoman Janet Yellen told a Congressional committee on Thursday that the Fed will likely raise interest rates soon.
Such a decision, which most markets anticipate to be a very likely scenario in mid-December – exactly a year after an initial rate hike, inched closer to realization recently following data which showed growth and buoyancy in the US economy.
“The evidence we have seen since we met in November is consistent with our expectation of strengthening growth and improving labor markets and inflation moving up,” Yellen said.
“The risk of falling behind the curve in the near future appears limited,” she added.
There had been fears that President-elect Donald Trump’s new economic policies could derail the Fed’s move toward higher interest rates. Trump had also said he wanted to revisit key economic regulations.
During her Congressional testimony, Yellen warned Trump not to “roll back the clock” and also said that the “economy that is operating reasonably close to maximum employment with inflation heading back to 2 percent.
Markets have for the past seven months anticipated an imminent interest rate increase but were disappointed as every consecutive Federal Reserve Open Market Committee (FOMC) failed to deliver a concrete date.
But expectations are very high of such a December announcement, especially following repeated positive economic data from the Commerce and Labor Departments.
The BRICS Post with inputs from Agencies
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