Tuck the Fed to raise rates this year Yellen – Televisa News

WASHINGTON, May. 22, 2015.- The president of the US Federal Reserve Janet Yellen said on Friday he expected the central bank will raise interest rates this year as the economy remains on track to rebound from a slow first quarter and the headwinds locally and externally began to give way.

Yellen spoke amid growing fears within the Fed about possible market volatility after the central bank to start raising rates, and a desire to convince skeptical investors to accept the inevitable. America is about to end six and a half years of interest rates close to zero

In a speech to a group Company in Providence, Rhode Island, Yellen said he expected economic data strengthened, noting that some of the economic weaknesses of the beginning of the year could be due to a “statistical noise”.

Although he claimed that the outlook for the economy is always highly uncertain and citing persistently low inflation, Yellen said delay monetary tightening until employment and prices reach the objectives of the central bank carry the risk of overheating the economy.

“Therefore, if the economy continues to improve as I hope, I think it will be appropriate at some point this year take the initial step of raising the target federal funds rate” and start normalizing monetary policy, Yellen said, in a speech at the Chamber of Commerce of Providence.

In a speech in March, the Fed chief said the central bank probably would raise interest rates this year, but cited concern that a fall in core inflation and low wage growth may delay plans of the body.

Then he said the Fed gave a “serious consideration” to start reducing monetary expansion. “With the continued improvement in economic conditions, an increase (rates) (…) could well be justified later in the year,” he said in March.

But the tone of Yellen on Friday on increasing rates it seemed stronger, as she and other Fed officials are trying to reduce the difference between the view of the central bank and the market.

The pre-speech period in Providence and helped meet that goal.

Interest rates rose slightly in the short term before Yellen speaking on Friday, and investor expectations about when the Fed will begin raising rates moved forward since December October.

“With the decline of the headwinds (…) the US economy seems well positioned for growth,” said the head of the Fed on Friday.

Yellen reiterated his opinion released in March once the Fed to start raising interest rates, the process will probably be gradual. He also claimed that the timing of a rise in federal funding will depend on the economic data that are known.

tfo