Janet Yellen: Delaying interest rate hikes "unwise"

Yellen appeared before the Senate Banking Committee on Tuesday and will testify to House Financial Services Committee on Wednesday.

"In the labor market, job gains averaged 190,000 per month over the second half of 2016, and the number of jobs rose an additional 227,000 in January". The odds of an early May hike inched up to almost 41% from 36.5%.

Oil prices dipped slightly after strong gains on Friday on reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January. Other Democrats asked about the lack of diversity at the Fed and what the bank could do about the still disproportionately high rates of unemployment for African Americans and Native Americans.

Abe said on Tuesday he agreed with Trump that currency issues should be left for the finance leaders of each country to discuss.

Yellen's testimony helped the yield on the 10-year Treasury note rise to 2.47 percent from 2.43 percent late Monday.

"Last year's sales of automobiles and light trucks were the highest annual total on record".

". housing construction has continued to trend up at only a modest pace in recent quarters".

Markets expect the Fed to increase interest rates two or three times this year, as strengthening economic growth translates into rising wages and prices.

Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, said: "Yellen is trying to nudge the expectations for a rate hike in March higher". Yellen also pointed to a number of uncertainties, including changes in US policy and productivity growth, that could alter the Fed's timeline.

Over the weekend Fed Vice Chair Stanley Fischer said there was significant uncertainty about United States fiscal policy under the Trump administration, but that the Fed would be strict in meeting targets of creating full employment and getting inflation to 2 percent, according to Reuters.

She went on to emphasize that key rate hikes will occur gradually, but did caution, "waiting too long to remove accommodation would be unwise, potentially requiring the (Fed) to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession".

The details of President Donald Trump's economic policies remain largely unknown.

"Technological change has generally been a source of income growth, but has also created huge disadvantages for those with less education, and those in manufacturing industries that have seen outsourcing from globalization and automation", she said.

"We're very well aware of the burden they face and are looking for every way we can find to mitigate those burdens", she said. On Tuesday, she reiterated that she meant to serve out her full term as chair.

The Republican chairman, Mike Crapo, sought assurance that the Fed would not seek to marginalize a new Republican-appointed vice-chairman of supervision.

  • Todd Kelly