Worried about the economy, the Fed is less clear on an imminent rise in interest rates – The World

One step forward, two steps aside. Decidedly, the speech of the Federal Reserve (Fed) is more of a tango that a straight path. In a speech Monday, June 6 at Philadelphia, Janet Yellen, president of the US central bank, showed less optimism about an imminent rate hike that at its last intervention April 27.

While there are still a few days, she claimed that a monetary tightening was likely “in the coming months” , the time horizon has now disappeared his vocabulary. The publication, Friday, June 3, job figures much worse than expected has obviously led to greater caution

Read also:. The Fed left the door open to a rate increase in June

Rather than deciding on a more or less precise timetable, M ^me Yellen preferred to emphasize the uncertainties of recovery US. It considers that these are “considerable” , adding that “progress toward our goals and, therefore, the appropriate monetary policy orientation will depend on how these uncertainties evolve “. The president of the Fed, speaking to the World Affairs Council, acknowledged that “monetary policy that my colleagues and I believe most likely to achieve and maintain full employment and stability prices have evolved and continue to evolve according to developments that affect our economic prospects and risks associated with the outlook “

Read also:. The Fed ready an imminent rise in interest rates

a rocky road

M ^me Yellen is notably back on 38 000 jobs recorded in May, a figure down sharply compared to the average for 2015 was 219 000. She described the report “disappointing” and ” overall worrying “, but cautioned that it would be wrong to focus on a secluded monthly statistics. “Although the economy has recently been affected by a combination of contradictory forces, I see good reason to hope that the positive forces that support employment growth and higher inflation will continue to compensate negative forces “, she said.

the path is however treacherous, especially on the issue of ” the momentum and resilience “ in domestic demand. “The poor performance in terms of investment is worrisome and the report on Friday’s employment recalls that this issue is still relevant” , warned M ^me Yellen. On employment, the Fed president think the downturn is temporary, while recognizing that it will take more data to confirm this view.

The vote on the “Brexit” for

She also stressed its concern about international issues, citing slowing growth in China and the vote in two weeks on release in the UK of European Union, which could have “important implications” economical.

in short, it seems increasingly unlikely that the Fed decides to raise interest rates at its next meeting on 14 and 15 June After the increase decided in December 2015, the first in ten years, the cost of money remains extremely low, between 0.25% and 0.50%. Seven years after the start of the recovery, the central bank still has not managed to find room to maneuver in case the economic situation would deteriorate again.

Lael Brainard, one of the members the monetary policy Committee had already warned Friday, in the wake of the employment figures, there was no urgency to proceed with monetary tightening in these circumstances. Even if M ^me Yellen reiterated Monday that a gradual increase is “appropriate” , uncertainty about when it will occur remains complete.