Yellen stresses gradual rate rise plan
Federal Reserve Chair Janet Yellen says the Fed still envisions only a gradual pace of interest rate increases in light of global pressures that could affect the US economy.
Yellen didn’t specify a timetable for further interest rate rises to follow the Fed’s December increase in from record lows. She says risks to the United States appear limited but cautions that that assessment is subject to “considerable uncertainty”.
Speaking to the Economic Club of New York, Yellen said the central bank is monitoring a global economic slump, sharply lower oil prices and stock market turbulence which, she said, have hurt some US consumers and key sectors such as manufacturing.
Singling out China – the world’s second-largest economy, after the United States – Yellen noted widespread uncertainty over how well Beijing will manage a delicate slowdown in coming years.
She said that because foreign economic growth seems to have further weakened in 2016, the Fed will “proceed cautiously” in raising rates.
In light of her comments, most economists expect no rise at the Fed’s next policy meeting – April 26-27 – despite remarks last week from other Fed officials that had raised the possibility of an increase then.
“Despite a growing chorus of calls from even centrist-leaning officials to resume raising policy rates, Chair Yellen stuck to the dovish script of the March meeting statement,” when the Fed expressed concerns about the global economy and kept rates unchanged, said Sal Guatieri, senior economist at BMO Capital Markets.
Investors welcomed Yellen’s message that the Fed would move slowly in raising rates. Major US stock indexes turned higher after she began her remarks, reversing an early loss, and bond yields dipped.
it changes every month..from having 4 rises this year to now “gradual”..the worlds other currencies are enjoying it..