Yellen hints at Federal Reserve interest rate hike

Janet L. Yellen, Chairwoman of the Board of Governors of the Federal Reserve, hinted at an interest rate increase, possibly as early as September. Photo by Kevin Dietsch/UPI

JACKSON HOLE , Wyo., Aug. 26 (UPI) — Federal Reserve Chairwoman Janet Yellen┬áseemed to signal the Fed will raise interest rates in a speech Friday in Jackson Hole, Wyo.

“I believe the case for an increase in the federal funds rate has strengthened in recent months,” she told a symposium sponsored by the Federal Reserve Bank of Kansas City, noting the strength of the labor market and the predictions for inflation and economic activity.

In December 2015 the Fed increased interest rates a quarter percentage point after seven years of keeping rates near zero. Increases expected this year were delayed because of slow economic growth and uncertainty about global developments.

“Economic activity continues to expand, led by solid growth in household spending, but business investment remains soft and subdued foreign demand and the appreciation of the dollar since mid-2014 continue to restrain exports,” Yellen said on Friday.

“While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market. Smoothing through the monthly ups and downs, job gains averaged 190,000 per month over the past three months.”

Her comments suggested a rate increase could occur at the Federal Reserve’s next policy meeting on September 20 and 21.

The decision will likely be made after a Labor Department report, expected September 2, which could show steady improvements in hiring and lead to a rate increase, the Wall Street Journal said Friday.

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