Monday, March 30, 2015

Fed's Yellen sees gradual rate hikes starting this year

The Fed stuck between a rock - little room to easy monetary policy as the economy contracts hard in 2016 and hard place - likely the domestic scapegoat for trends driven by a global economy that it cannot control, will direct policy according to self-preservation (domestic focus) rather than global necessity (international crisis).

Headline: Fed's Yellen sees gradual rate hikes starting this year

FRANCISCO/WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen signaled that the U.S. central bank will likely start raising borrowing costs later this year, even before inflation and wages have returned to health, but emphasized the return to normal interest rates will be gradual.

A downturn in core inflation or wage growth could force the Fed to delay the first increase to borrowing costs since 2006, the central bank's chief said on Friday, but policymakers should not wait for inflation to near the Fed's 2-percent goal before tightening monetary policy. The Fed has held short-term borrowing costs near zero since December 2008.



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