Fed on Course to Raise Rates at Upcoming Meet: Yellen
Leaving rates unchanged now may lead it to hiking rates quickly in future, which could cause a recession, says Fed chief
New York: The Federal Reserve will likely need to raise interest rates at an upcoming meeting, Fed Chair Janet Yellen said on Tuesday, although she flagged considerable uncertainty over economic policy under the Trump administration. Yellen said delaying rate increases could leave the Fed’s policymakingcommitteebehindthecurveand eventually lead it to hike rates quickly, which she said could cause a recession.
“Waiting too long to remove accommodation would be unwise,” Yellen said be- fore the US Senate Banking Committee, citing the central bank’s expectations the job market will tighten further and that inflation would rise to 2%. “At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”
Yellen did not say if Fed policymakers expected the economy would warrant three interest rate increases this year, as they last signaled in December. Nor did she give indications whether the first rate hike of the year might come at its next meeting in March.