“We’re reasonably close to what is thought of as full employment and the inflation rate is higher than a year ago”, Fischer added.
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“The reason for the wide range is that the economy is frequently buffeted by shocks and thus rarely evolves as predicted”, said Yellen.
Federal Reserve Chairwoman Janet Yellen indicated on Friday that the central bank may raise interest rates prior to its December meeting as the USA economy is showing growing signs of strength.
Yellen, Chairwoman of the Board of Governors of the Federal Reserve, hinted at an interest rate increase, possibly as early as September.
The comments, at the annual jamboree of central bankers in cowboy country, fuelled speculation that rates would rise again before the end of the year – possibly as soon as next month. She, however, failed to disclose the timing of the potential rate hike.
Recent hawkish comments from other Fed officials have raised expectations of a United States rate hike this year, though markets are not fully pricing one in till 2017.
CURRENCIES: The dollar rose to 101.46 yen from 100.57 yen the previous day. U.S. stock prices fell in choppy trading, while prices of U.S. Treasuries were mostly weaker.
Even if the Fed does decide to push interest rates up, however, it will most likely only be by around a quarter of a percent.
“As ever”, she said, “the economic outlook is uncertain, and so monetary policy is not on a preset course”.
Ms Yellen delivered the remarks at the Jackson Hole meeting of central bankers in Wyoming on Friday afternoon.
Such a view is “exaggerated”, Yellen said, because the Fed will be able to buy bonds and make pledges about future policy to lower interest rates.
Fed leaders have at times used the Jackson Hole event to announce major policy shifts. “Our ability to predict how the federal funds rate will evolve over time is quite limited because monetary policy will need to respond to whatever disturbances may buffet the economy”, she explained.
She also noted that while inflation is still running below the Fed’s 2% target, it’s being depressed mainly by temporary factors.
Janet Yellen, chair of the US Federal Reserve, has left the door open for a hike as early as next month.
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The dollar gave up earlier gains to trade little changed on Friday after Federal Reserve Chair Janet Yellen gave no indication a USA interest rate rise was imminent, even though she acknowledged the case for a hike has increased recently.
