JACKSON HOLE, EU.- The president of the Federal Reserve (Fed), Janet Yellen, he offered a sobering dose of uncertainty about the course of monetary policy and the economy, suggesting that interest rates may rise faster than expected or just back to zero.
During the annual conference of monetary policy in Jackson Hole, Wyoming, Yellen spoke of the long-term risks that may push the Fed into a new world of politics monetary, which would include expanding bond purchases. It also strengthened expectations of a rise in interest rates in the short term.
Handed a graph of probabilities for the federal funds rate in the coming months. The scheme undermined the “plot points” of the Fed itself for the expected rates, showing a wide range of possibilities, from an increase in the cost of credit to 3% in 2017, to a low back to zero.
the comments offered little clarity about where the Fed goes and, instead, sent a message to the markets: pay less attention as a guide to the quarterly summary of economic forecasts of the Federal Reserve, known as scatterplot , and look more at the economic numbers.
the Fed has discussed the usefulness of the scatterplot, which some interpret as an accurate projection rates. The “fan chart” of likely interest rates, broad enough to include several results and predictions of markets is a change that the Fed discussed as a permanent to its summary of economic forecasts change.
Yellen he said that uncertainty should be taken as part of life. “Our ability to predict how the rate of federal funds in time is quite limited,” he said, explaining the graph, which puts the current rate expected by the Fed in June amid several possible outcomes.
“the reason for the wide range is that the economy is frequently shaken by shocks and so rarely evolves as predicted,” he said.
for the United States, Yellen put aside some of the most adventurous ideas, to reach the conclusion that the Fed could face a crisis in the future with the tools at hand.
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