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FX.co ★ Janet Yellen recommends avoiding higher interest rates

Janet Yellen recommends avoiding higher interest rates

Janet Yellen recommends avoiding higher interest rates

The US Treasury Department doubts the necessity to increase the key interest rate. Treasury Secretary Janet Yellen supposes that there are no reasons for higher interest rates at the moment.

“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it,” Ms. Yellen said at The Wall Street Journal’s CEO Council Summit.

Notably, economists have long been debating a possible surge in US inflation amid large government spending. They have also tackled the influence of the government’s actions on the US economic indicators. The US economic recovery has caused even fiercer debates.

Since the beginning of the year, Fed’s Chairman Jerome Powell has repeated several times that inflation is likely to rise as the economy recovers. He also thinks that it will be temporary and will hardly lead to a raise in the key interest rate.

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Janet Yellen said, making it clear that this will not happen anytime soon. Such an announcement had a significant influence on the markets. The fact is that these comments belong to a person who is well aware of how the US Fed and the US Treasury Department work.


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