Fed’s Janet Yellen ‘Looking Forward’ to Interest Rate Hike
Federal Reserve Chair Janet Yellen said on Wednesday she was “looking forward” to a U.S. interest rate hike that will be seen as a testament to the economy’s recovery from recession.
In prepared remarks to the Economic Club of Washington, Yellen did not indicate if she still expected a rate hike would be warranted at the Fed’s last remaining policy meeting this year on Dec. 15-16.
She expressed confidence in the U.S. economy, saying job growth through October suggested the labor market was still healing although not yet at full strength. She also reaffirmed her view that the drag from abroad on U.S. economic growth and inflation would start to moderate next year.
Already, she saw risks from abroad as having dissipated since the summer, and noted consumer spending was “particularly solid” and that its outlook remained positive.
“When the Committee begins to normalize the stance of policy, doing so will be a testament … to how far our economy has come,” she said, referring to the Fed’s policy-setting committee. “In that sense, it is a day that I expect we all are looking forward to.”
Investors were already betting the Fed would lift its benchmark rate this month from the 0 to 0.25 percent range where it has held since 2008. Economists also see a high chance of a December lift-off.
Following the release of Yellen’s remarks, the dollar initially strengthened in the currency markets, indicating more confidence that higher interest rates were around the corner.
“Yellen gave a fairly positive assessment of the economy that would be consistent with the Fed raising rates at their December meeting,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
As in previous speeches and public appearances, Yellen said the timing of the first U.S. rate increase in nearly a decade was not as important as the path of subsequent hikes, which she said should be gradual.
“An abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession,” she said.
I hope you appreciated this article. Before you go, I’d like to ask you to please support the Forward’s award-winning, nonprofit journalism during this critical time.
Now more than ever, American Jews need independent news they can trust, with reporting driven by truth, not ideology. We serve you, not any ideological agenda.
At a time when other newsrooms are closing or cutting back, the Forward has removed its paywall and invested additional resources to report on the ground from Israel and around the U.S. on the impact of the war, rising antisemitism and the protests on college campuses.
Readers like you make it all possible. Support our work by becoming a Forward Member and connect with our journalism and your community.
Make a gift of any size and become a Forward member today. You’ll support our mission to tell the American Jewish story fully and fairly.
— Rachel Fishman Feddersen, Publisher and CEO
Join our mission to tell the Jewish story fully and fairly.
