Federal Reserve Chair Janet Yellen said on Wednesday she was “looking forward” to a US interest rate rise that will be seen as a testament to the economy’s recovery from recession.
Fed policymakers are widely seen raising interest rates for the first time in almost a decade at their next meeting on December 15-16, but they continue to parse data and trends carefully given the uneven nature of the US recovery.
In her remarks to the Economic Club of Washington, Yellen expressed confidence in the US economy, saying job growth through October suggested the labour market as healing even if not yet at full strength.
Yellen also reaffirmed her view that the drag on US economic growth and inflation from weakness in the global economy and falling commodity prices would moderate next year. US consumer spending was “particularly solid”, she noted.
When the Committee begins to normalise the stance of policy, doing so will be a testament ... to how far our economy has come. In that sense, it is a day that I expect we all are looking forward to.Janet Yellen, Chairperson, US Federal Reserve
Investors are already betting the Fed will lift its benchmark federal funds rate this month from the zero to 0.25 percent range where it has been held since 2008. Economists also see a strong chance of a December rate rise.
The US dollar strengthened on Wednesday and stocks fell on Wall Street, after Yellen’s comments.
I was a little surprised she sounded as hawkish as she did given we’re two days away from the non-farm payrolls report and a couple of weeks away from the Fed FOMC meeting.Michael O’Rourke, Chief Market Strategist, JonesTrading
Yellen also is due to testify on the economic outlook before a joint Congressional committee on Thursday.
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