Janet Yellen remains prudent in “disturbances” that can disturb the economy (AFP / File / YURI GRIPAS)
in a speech Friday at the annual Jackson Hole monetary conference (Wyoming), the patron saint of the Fed welcomed the fact that the world’s largest economy “approaches” goals “maximum employment and price stability”.
“the case for a rise interest rates have strengthened in recent months, “she said, adding that the Fed continued” to provide for a gradual increase in rates over time. “
growth US, just 1.1% in Q2, expected to reach 2% on the year, the Fed hopes, while the 0.9% annual inflation, according to the PCE index, slowly approaches the target 2%.
the unemployment rate at 4.9% is close to full employment.
however, Yellen did not seem to report an impending monetary tightening but it wants keep all options open before the next meeting of the monetary Board of the Central bank in a little over three weeks.
“Our ability to predict changes in interest rates is very limited” because you have to answer ” disturbances that can disrupt the economy, “she warned.
the Federal Open Market Committee meets on September 20 and 21, before last appointment before the presidential election November and financial players believe a little hike overnight rate from this coming, given the course of the financial futures markets. The rates are currently between 0.25% and 0.50%.
The central bank since the financial crisis tightened its monetary policy only once in December 2015, has recently stopped to push further monetary tightening in the face of slowing growth in China and face the risk of Brexit. “Monetary policy is not a predetermined trajectory,” insisted Ms. Yellen.
The number 2, Stanley Fischer, for his part, recognized that the highly anticipated report on employment in August, which will be released on september 2, would have a “weight” on the next Fed decision . Forecasts on the state of employment in August are not yet available. In July, job creations were very solid at 255.000
-. No imminent promise –
“This is not the promise of a share in September ( …). We believe that December is more likely, “said Ian Shepherdson of Pantheon Macroeconomics.
Omer Esiner, an analyst at Commonwealth Foreign Exchange, the tone of the president of the Fed yet appeared “a bit more positive than many had thought.” But he also believes it “does not provide a clear signal that rates will rise in the coming months.”
Since the financial crisis, the US Federal Reserve tightened monetary policy only once in December 2015 (AFP / Archives / KAREN BLEIER)
in this speech more than 20 pages devoted to monetary policy tools, Yellen was especially attached to describe the means that could use the central bank if further slowdown in growth.
“the Fed may wish at some point to consider new options for consolidating a strong and resilient economy,” she said. It seemed, however, exclude the idea, advocated by John Williams including the president of the San Francisco Fed, to meet the inflation target, which would allow the Fed to wait longer before acting on rates the rise.
“the monetary Committee is actively considering these assumptions,” said she noted.
the boss of the Fed has also long advocated monetary largesse that the central bank adopted after the financial crisis.
“Given the slow pace of recovery, some have questioned the effectiveness of asset purchases. These critics fail to consider the unusual obstacles economy met after the crisis, “argued Ms. Yellen.
the day before, in the hotel in the mountain resort where the conference is held, a group of activists of the association” Fed up “has met a dozen senior officials of the bank in a lively debate.
in this discussion, a first for the Federal Reserve, the Fed members have assured the participants, who do not want of rising interest rates, the central bank has no intention of stifling the recovery, but rather to prevent overheating.
Stanley Fischer, the vice president, but also Lael Brainard and the Governor Fed President William Dudley of New York attended the meeting where members of the organization “Fed up” strongly denounced inequality.
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