Janet Yellen is Looking Forward to Rate Hike

Federal Reserve Chair Janet Yellen said on Wednesday she was “looking forward” to a U.S. interest rate hike that will be seen as a testament to the economy’s recovery from recession.

In prepared remarks to the Economic Club of Washington, Yellen did not indicate if she still expected a rate hike would be warranted at the Fed’s last remaining policy meeting this year on Dec. 15-16.

She expressed confidence in the U.S. economy, saying job growth through October suggested the labor market was still healing although not yet at full strength. She also reaffirmed her view that the drag from abroad on U.S. economic growth and inflation would start to moderate next year.

Already, she saw risks from abroad as having dissipated since the summer, and noted consumer spending was “particularly solid” and that its outlook remained positive.

“When the Committee begins to normalize the stance of policy, doing so will be a testament … to how far our economy has come,” she said, referring to the Fed’s policy-setting committee. “In that sense, it is a day that I expect we all are looking forward to.”

Investors were already betting the Fed would lift its benchmark rate this month from the 0 to 0.25 percent range where it has held since 2008. Economists also see a high chance of a December lift-off.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza