Federal Reserve Chair Janet Yellen on Monday gave a largely upbeat assessment of the U.S. economic outlook and said interest rate hikes are coming but, in an omission that stood out to some investors, gave little sense of when.
Overall, a Yellen said, “I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.”
While last month’s jobs report, released Friday, was “disappointing,” and bears watching, policymakers will respond “only to the extent that we determine or come to the view that the data is meaningful in terms of changing our view of the medium- and longer-term economic outlook.”
Though she stressed surprises could emerge that could change her expectations, and listed four main risks to the U.S. economy – slower demand and productivity, and inflation and overseas risks – she concluded by downplaying them all and flagging her expectation that “further gradual increases in the federal funds rate are likely to be appropriate.”
Still, Yellen was careful not to give any hints about the timing of a next rate increase, in contrast to a speech on May 27, when she said such a move would probably be appropriate “in coming months.” Read more