U.S. Federal Reserve chairwoman Janet Yellen on Thursday gave an upbeat assessment of the U.S. economy before lawmakers, signaling an interest rate hike likely in December.
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The ECB cut its deposit rate by 0.1 percentage points to -0.3 percent, charging banks more for parking cash with the central bank and said it would announce more easing measures at its 1330 GMT press conference.
“On balance, economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market”, Yellen told the Economic Club of Washington on Wednesday, according to a text of her prepared remarks.
Federal Reserve Bank of Atlanta President Dennis Lockhart said he favors raising interest rates this month, adding to signs that the central bank will proceed with its first increase since 2006.
Raising rates “will be a testament, also, to how far the economy has come in recovering from the effects of the financial crisis and the Great Recession”.
A hike in official interest rates would testify to the progress the United States has made in shrugging off the fallout of the crash.
Does the Fed want to be forced to raise rates at every meeting in, say, 2017 to tamp down inflation running well above target?
Waiting too long to raise rates could deal an accidental blow to the economy, she warned. Platinum was little changed after dropping as much as 0.9% to the weakest level since December 2008. They would accept jobs if the job market improved, she said. “The current pace of job creation is twice that needed to absorb growth in the working age population”, said Mark Zandi, Chief Economist at Moody’s Analytics.
“That initial rate increase would reflect the Committee’s judgment, based on a range of indicators, that the economy would continue to grow at a pace sufficient to generate further labor market improvement and a return of inflation to 2 percent, even following the reduction in policy accommodation”, she said.
She is doing the same on Thursday at a hearing before the Congress’ Joint Economic Committee. Generally, it’s expected to show that about 190,000 jobs were added to payrolls last month, coming on the heels of a stronger-than-expected gain of 271,000 jobs in October.
“I would expect to see some upward pressure on wages – I think we’ve seen some welcome hints”, she said.
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“The economy has come a long way toward (the Fed’s) objectives of maximum employment and price stability”, Yellen said. The Fed’s benchmark rate has been at a record low near zero for the past seven years.
