Business

Yellen Sees More Rate Hikes With Economic Growth

Yellen Sees More Rate Hikes With Economic Growth

Yellen defended the central bank's independence Wednesday from Republican lawmakers pushing for major changes in how the Fed operates and how regulators oversee the nation's banking system.

Yellen was appearing in Congress for the first time since Republicans took control of the White House and both houses of the legislature and she nodded to the uncertainties over the direction of U.S. economic policy. His initiatives are meant to achieve his goal of doubling growth to around 4%, up from the anemic 2% pace that prevailed since the Great Recession ended in 2009. "Consumer spending has continued to rise at a healthy pace, supported by steady income gains, increases in the value of households' financial assets and homes, favorable levels of consumer sentiment, and low interest rates", Yellen said in her prepared testimony.

Yellen said a rate increase would be appropriate at one of the Fed's forthcoming meetings if the economy evolves in line with expectations, adding that waiting too long to remove monetary policy accommodation would be unwise.

She suggested that fiscal policy should aim at lifting up productivity and improving longer-run economic growth and living standards of American people. We estimate that the CPI and PPI reports imply an increase of +0.33% (mom) in core PCE inflation, or 1.8% from a year earlier, to be reported on March 1st. Yellen and her colleagues are sticking to their forecast that they will raise interest rates three times this year. The London benchmark on Tuesday fell for the first time in six sessions, after choppy trading driven by lower-than-expected inflation data and a round of corporate news.

The central bank lowers the rate, which banks use when giving one another short-term loans, to stimulate borrowing and investment, as it tends to drive down interest rates on mortgages and other loans.

Dan Carter admits to drink driving
Carter began his second playing stint in France after the 2015 World Cup, but it hasn't been an entirely smooth ride. Carter and fellow All Black Joe Rokocoko were cleared of any wrongdoing by an investigation by French rugby.

Yellen will be back on Capitol Hill to appear before the House Financial Services panel at 10 a.m. ET.

Democrats argued that bank loans have actually been rising and that repealing the Dodd-Frank law could bring back the unsafe practices that led to the 2008 financial crisis. Yellen has been a staunch defender of the law. Investors will be particularly interested in her opinion on Trump's economic plans especially his tax reform idea.

Trump has been highly critical of Yellen, but can not remove her from office as the central bank is supposed to be free of political influence.

Pressed by anti-bank Democratic Senator Elizabeth Warren on claims by Trump's economic adviser, former Goldman Sachs chief operating officer, Gary Cohn, that banks had been forced to build capital instead of lend Dr Yellen retorted to expunge a misconception that higher equity capital is equivalent to a cash reserve requirement.


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