The Scotsman Guide - Victor Whitman - 17 November 2016
In her first comments since the election, Federal Reserve Chair Janet Yellen said a rate hike could come “relatively soon” despite uncertainty over the economic policies of the incoming Trump administration.
Speaking before the Congress Joint Economic Committee on Capitol Hill, Yellen said that her outlook hadn’t substantially changed and that the economy is “making very good progress toward our goals.” Prior to Nov. 8 election, analysts and the markets were betting that the Federal Reserve would raise short-term rates at the December meeting.
However, President-elect Donald Trump’s victory defied the polls, and prompted a massive selloff in bonds. Treasury yields were pushed up dramatically since the election.
Yellen didn’t mention Trump by name, but did acknowledge that the new administration’s policies appear to promote an expansionary vision at a time when the economy is near full employment. Such apolicy could have implications on employment and inflation, she said.
“We will be watching the decisions that Congress makes, and updating our outlook as the policy landscape becomes clear,” Yellen said. “My guess is that uncertainty about these matters will last for some considerable time,” she added.
Yellen also said that she fully intended to serve out her four-year term, which ends in January 2018.