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 Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam