Fed Shouldn’t Let Economy Run Too Hot

With monetary policy still modestly accommodative, the U.S. central bank should continue to raise interest rates slowly to keep jobs plentiful and inflation low, Federal Reserve Chair Janet Yellen said on Thursday.

“I think that allowing the economy to run markedly and persistently “hot” would be risky and unwise,” Yellen said in remarks prepared for delivery to the Stanford Institute for Economic Policy Research.

While there are no signs as yet that the Fed is behind the curve or the economy is in danger of a sudden surge in inflation, she said, “I consider it prudent to adjust the stance of monetary policy gradually over time.”

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.