Yellen points to March rate hike as Fed signals end of easy money
The U.S. Federal Reserve's long-stalled 'liftoff' of interest rates may finally get airborne this year as policymakers from Chair Janet Yellen on Friday to regional leaders across the United States signaled that the era of easy money is drawing to a close.
Yellen capped off a seemingly coordinated push from the central bank on Friday when she cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, and likely be able to move faster after that than it has in years.
It's a welcome turn for the Fed chair, who has hoped to get rates off the ground throughout her three-year tenure, and now sees the economy on track and investors aligned around the idea.
"At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Yellen said at a business luncheon in Chicago.
"The process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016," she added.
And while Yellen on Friday was quick to point out that the Fed's closeness to its goals of full employment and 2 percent inflation were currently guiding its rate hike plans, others pointed to further upside risks from economic programs proposed by President Donald Trump.
"If you look at what's been happening to the economy since November 8 (election) ... and to the asset markets, and if you take into account the operation of what people of my age call 'animal spirits' ... you will realize that there has been a substantial wealth effect in this economy," said Fed Vice Chairman Stanley Fischer in a separate appearance on Friday.
Link: mobile.reuters.com/article/idUSKBN16A26C
Yellen capped off a seemingly coordinated push from the central bank on Friday when she cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, and likely be able to move faster after that than it has in years.
It's a welcome turn for the Fed chair, who has hoped to get rates off the ground throughout her three-year tenure, and now sees the economy on track and investors aligned around the idea.
"At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Yellen said at a business luncheon in Chicago.
"The process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016," she added.
And while Yellen on Friday was quick to point out that the Fed's closeness to its goals of full employment and 2 percent inflation were currently guiding its rate hike plans, others pointed to further upside risks from economic programs proposed by President Donald Trump.
"If you look at what's been happening to the economy since November 8 (election) ... and to the asset markets, and if you take into account the operation of what people of my age call 'animal spirits' ... you will realize that there has been a substantial wealth effect in this economy," said Fed Vice Chairman Stanley Fischer in a separate appearance on Friday.
Link: mobile.reuters.com/article/idUSKBN16A26C
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