Downplaying risk of recession, Yellen indicates an interest rate hike is coming this month
December 3, 2015
Federal Reserve Chairwoman Janet L. Yellen on Thursday the risk of the U.S. falling into recession next year and indicated central bank policymakers are ready to raise a key interest rate this month, in part to give them flexibility to lower it if the economy slows.
“It would be helpful to … give us more scope to be stimulating the economy and responding to adverse shocks if the average level of interest rates were somewhat higher,” Yellen said during a hearing of Congress’ Joint Economic Committee.
The federal funds rate, a key short-term benchmark, has been near zero since December 2008 in an attempt to boost economic growth during the Great Recession and its aftermath. Based on comments by Yellen and other officials, Fed policymakers are widely expected to nudge the rate up 0.25 percentage points at their Dec. 15-16 meeting.
SOURCE: Los Angeles Times