The US economy is on a solid course and still on track to warrant further interest rate hikes, Federal Reserve Chair Janet Yellen said on 7 April.
Yellen spoke on a panel alongside her three predecessors who ran the worlds most powerful central bank. She said that, seven years after the financial crisis, the labour market was now close to full strength, arguing that inflation would not be held down by the strong dollar and low oil prices.
We have continued to see good job performance, some evidence of inflation moving up, so that was our expectation when we raised rates in December, she told an audience in New York. We think a gradual path of rate increases will be appropriate and stand ready to adjust what we do depending on how our views of the economy evolve.
Yellen was speaking on a panel with former chiefs of the US central bank, including Ben Bernanke, Paul Volcker, and Alan Greenspan.
Further rate increases will be justified, but for a variety of reasons – particularly a set of headwinds that are the legacy of the financial crisis that we suffered, and weak global growth and the strong dollar that has gone with that – that the level of rates, that its sometimes called the neutral rate, a level of short-term rates that would neither be particularly stimulating the economy or holding it back, she said.
