Yellen: Uncertainty strengthens the gradual approach to raise interest rates

26 Sep 2017 07:51 PM

 The remarks by Janet Yellen, Federal Reserve Governor, were as follows:

  • A gradual approach to rate hikes is appropriate in the light of subdued inflation.
  • It would be unwise to leave interest rates unchanged until inflation reaches 2%.
  • The Federal Reserve is still able to meet the inflation target of 2% even though the estimates of inflation expectations have been underestimated or overestimated.
  • The downward pressure on inflation could be unexpected persistent.
  • There is high probability that inflation may not stabilize at 2% over the next few years.
  • I suggest labor market is healthy, without being too lack but not overheated.
  • Evidence of an improved labor market is not definitive, must be open-minded.
  • The FOMC should be wary of moving too gradually.
  • It is not wise to keep the policy on hold until inflation reaches 2%.
  • I see risks of overheating without a moderate hike over time.
  • Inflation data can vary from month to month.
  • I expect inflation to rise somewhat in the coming months.
  • The labor market is getting better and stronger.
  • The FOMC is not currently considering changing the inflation target.
  • It would not be a tragedy if inflation overshoot.
  • The Fed needs more monetary policy tightening but not an excessive amount.

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