Yellen: U.S. Fiscal Policies Could Alter Fed's Actions, But Rate Hikes Are LikelyBy Jim Wyckoff
Tuesday February 14, 2017 10:21
(Kitco News) - Federal Reserve Chair Janet Yellen says in prepared text for her testimony to the U.S. Senate Tuesday that any new fiscal policy changes from the new administration of U.S. President Donald Trump could alter the course of U.S. monetary policy. However, she said it's too early to make determinations on what will occur on that front.
Yellen also said that while the Fed's monetary policy remains "accommodative," she expects the Fed to raise interest rates at some point, saying waiting too long to tighten U.S. monetary policy would be unwise.
The Fed chair also said in her prepared text that the U.S. economy is growing at a moderate pace, and she expects the global economies to also pick up steam over time.
She also said the recent strong U.S. dollar and weakened global economic growth have restrained manufacturing output during the past two years.
The marketplace is deeming Yellen's remarks as a bit hawkish on U.S.
monetary policy. Gold prices have lost most of their early gains, while U.S.
Treasury yields up-ticked a bit. The U.S. dollar index also moved higher after Yellen's comments.
Yellen's remarks to the Senate are part of her two-day appearances before the U.S. Congress as part of the semiannual Humphrey-Hawkins report to the Congress.