The central bank really is on track to raise interest rates this year, assured Fed Chairwoman Janet Yellen Friday.
In case investors didn’t get it every other time the Fed has talked about rising rates, “caution” was Yellen’s emphasis, the Wall Street Journal reports. Yellen told the Greater Providence Chamber of Commerce in Providence, R.I., that the central bank is still looking for a more fully healed job market, rising inflation, and more economic growth. Writes the Wall Street Journal:
It could be “several years,” she said, before the federal funds rate is back at a level the Fed considers to be normal in the long-run. Fed officials see the rate getting to 3.75% someday. Their March forecasts showed that even at the end of 2017, they expected the rate to still be slightly below that level.
Unemployment levels are low, dipping to 5.4% in April, but it doesn’t include discouraged workers that have left the job market or those in part-time jobs looking for full-time employment, Yellen said. Growth abroad is also slowing, impacting U.S. exports.
The next Fed meeting will take place June 16-17.
Photo: IMF via Flickr.