News Column

Yellen: Rate Hike May Come Sooner Than Forecast

July 15, 2014

WASHINGTON (Alliance News) - The Federal Reserve may raise interest rates sooner than earlier forecast if improvements in the US labor market are sustained, Fed Chairman Janet Yellen will tell Congress Tuesday morning.

"If the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned," Yellen said in prepared remarks.

Speaking to the Senate Committee on Banking, Housing, and Urban Affairs, Yellen said the Fed intends to fully wind down its controversial bond-buying plan in October.

However, she struck a cautious tone in noting that the unemployment rate of 6.1% remains above Federal Open Market Committee's target.

As such, "if economic performance is disappointing, then the future path of interest rates likely would be more accommodative than currently anticipated."

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Source: Alliance News

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