Economy steady for more rate hikes: Yellen WITHOUT PLEA, SEZS MAY FACE CANCELLATION

American central bank gradually suck out $4-tr liquidity infused after 2008 FED RESERVE chair Janet Yellen said they continue to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time, while reductions

Washington, July 12: The United States economy is healthy enough to absorb further gradual rate increases and the slow wind down of the massive bond portfolio accumulated by the Federal Reserve during the financial crisis, said Fed Chair Janet Yellen in a prepared testimony to be delivered to Congress on Wednesday morning.

In what may be one of her last appearances on Capitol Hill, Ms Yellen depicted an economy that, while growing slowly, continued to add jobs, benefited from steady household consumption and a recent jump in business investment, and was now being supported as well by stronger economic conditions abroad.

The Fed “continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time,” Ms Yellen said, while reductions in the Fed’s more than $4 trillion in securities are likely to begin “this year.”

Ms Yellen will present her latest economic summary to the House Committee on Financial Services, after which committee members will question her.

Her appearances before the House panel have sometimes involved sharp exchanges with lawmakers who think the Fed’s influence over the economy has grown too large, and who want policymakers to be guided more closely by a mathematical rule for setting interest rates.

In a report released last week the Fed compared its current policy to that prescribed by a variety of such rules — pointing out that the choice of a rule itself involved judgments that would lead to vastly different outcomes.

Ms Yellen referred House lawmakers specifically to that section of the report in her testimony.

Her appearance comes as the Trump administration mulls whether to replace her when her term ends in February.

By her testimony today, the economy is currently on an even keel, near or beyond full employment and the Fed is steadily moving rates higher.

The reduction in the balance sheet, which will begin slowly as the Fed reinvests only a portion of the holdings that mature each month, will mark the final exit from crisis-related policies. — Reuters The commerce ministry has decided to cancel approval of all those special economic zones (SEZs) whose validity has expired and the developer has not sought extension.

According to minutes of the meeting of the Board of Approval, the decision was taken on July 3. The inter-ministerial board, which deals in SEZ related matters, is headed by commerce secretary Rita Teaotia.

“The board has decided to cancel all those letters of approval, validity of which had expired and the developer had not approached the board for further extension,” the minutes of the meeting said.

The state governments in question have also been asked to recover duty exemptions from the SEZs.

At the meeting, the board considered cancellation of as many as 62 special economic zones, including the Cochin Port Trust, as the developers have not shown interest in moving forward with the projects.

Further, the board has given more time to 10 SEZ developers and units, including HBS Pharma and Mayar Infrastructure, to implement their projects.

Others that have got additional time for their projects include Lanco Solar, KPIT Technologies and PreciStat IT Solutions. — PTI