Experts' Corner

guru forex ask

Knowledge is the eye of desire and can become the pilot of the soul.

  • Chaoxiang Lee
  • Posted Articles: 13
  • Last Posted: 2017-06-22 01:50:57
    • Guru StarsGuru StarsGuru StarsGuru StarsGuru StarsGuru Stars

Fed to Raise Rates Numerous Times until 2019, says Yellen

2017-02-09 11:11:04

Janet Yellen has something to tell us: await a number of interest rate hikes from the Federal Reserve from this year until 2019 ends.

Yellen, speaking before members of a non-partisan business organization in San Francisco, mentioned she and most of her policymakers were mulling over the concept of raising rates numerous times this 2017 through the end of 2019, adding it is near their estimation of its longer-stretch rate of 3%. The Fed, according to her, is seeking to achieve that rate to tell themselves that the economy will remain balanced even after reaching its goals.

The Fed head stated what many market players have been dying to ask: the good timing for increasing the rate. She simply said she cannot give the precise timeframe for that because deciding on such a matter will be based on the economic condition in the succeeding weeks or months. Referring to its complexity, she added the American economy is full of circumstances and surprises. But Yellen warned there will be a change in rate projections since the economic outlook changes, too.

Yellen noted policymakers have mitigated some of its moves. But they want to ensure the growth is firm enough to weather any unforeseen event, saying they do not have ample legroom to slash rates.

She placed the spotlight on the country’s inflation rate as it still far from their 2% goal. Regarding the labor market, Yellen mentioned the market may expect some progress. Recently, salary growth has only started to regain but somewhat low. Yellen said a wider unemployment gauge is not yet back to its early rates.

Yellen implied the sluggish productivity growth could possibly impede them from reverting the rate to its neutral level. But she stated it is about time to taper its monetary policy instruments since the US economy inches closer to its targets. Waiting too long can result in imbalance, excessive inflation, or both. Should that happen, the Fed chairman pointed out it could pressure central bank officials to increase rates promptly, which in turn could make the economy experience recession anew.