World Economy

Yellen Points to March Rate Hike

Yellen Points to March Rate Hike
Yellen Points to March Rate Hike

The US Federal Reserve’s long-stalled ‘liftoff’ of interest rates may finally get airborne this year as policymakers from Chair Janet Yellen on Friday to regional leaders across the United States signaled that the era of easy money is drawing to a close.

Yellen capped off a seemingly coordinated push from the central bank on Friday when she cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, and likely be able to move faster after that than it has in years, Reuters reported.

It’s a welcome turn for the Fed chair, who has hoped to get rates off the ground throughout her three-year tenure, and now sees the economy on track and investors aligned around the idea.

“At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Yellen said at a business luncheon in Chicago.

“The process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016,” she added.

Stocks were up slightly, and futures tied to rate-hike expectations moved little on Yellen’s remarks. The comments from Fed speakers this week had already pushed market pricing of a March hike to 80%.

The Fed has struggled for the past three years to raise interest rates off the zero lower bound as the US economy slowly healed after the Great Recession. Issues from sluggish inflation globally to the dampening effect of a strong dollar and low energy prices blew them off course.


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