News

Fed sees limits to interest rate rises

Fed sees limits to interest rate rises
Business
Federal Reserve Chair Janet Yellen said the bank was looking to normalise its policies, neither boosting or limiting economic activity.

But a key bank interest rate would not have to rise "all that much further" to reach that neutral level, she said.

She also said she expected further increases over the next few years.

Ms Yellen was reporting to members of Congress about bank policy and the economic outlook.

The US jobs market has strengthened and inflation is expected to rise toward the Federal reserve s 2% target, she said. The global economy has also improved, although economic challenges remain, she added.

She said the Fed was committed to relying primarily on interest rates as its key policy tool and noted that many of her colleagues thought one further rate increase would be warranted this year.

But interest rates are unlikely to rise to levels that were once common, she said.

"The Committee continues to anticipate that the longer-run neutral level of the federal funds rate is likely to remain below levels that prevailed in previous decades," she said in prepared remarks to Congress on Wednesday.

The Federal Reserve has pursued gradual interest rate increases in recent years, after lowering them to boost economic activity amid the financial crisis.
Read more on bbc.com
News Topics :
Similar Articles :
Business
WASHINGTON With voters set to choose a new president and Congress in six days, the Federal Reserve will likely keep a low profile when it ends a meeting Wednesday...
Business
WASHINGTON Federal Reserve Chair Janet Yellen on Wednesday indicated that the U.S. economy is on track for an interest rate hike this month, but she said the Fed will...
Business
WASHINGTON U.S. Federal Reserve Chair Janet Yellen signalled Friday that the Fed will likely resume raising interest rates later this month to reflect a strengthening job market and inflation...
Business
WASHINGTON Federal Reserve Chair Janet Yellen told Congress on Thursday that an improving U.S. economy has strengthened the case for raising interest rates. Her comments were seen as boosting...
Business
The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, as anticipated, but left its rate outlook for the coming years unchanged even as policymakers...