The Federal Reserve is getting closer to raising interest rates again, the head of the U.S. central bankand other policymakers said on Friday in comments that left the door open for a hike as early as next month. Fed Chair Janet Yellen told a global monetary policy conference that the case for a rate increase had grown stronger, while Fed Vice Chair Stanley Fischer suggested a move could come at the central bank’s September policy meeting if the economy was doing well.
Wall Street will fixate on a wave of U.S. economic data next week, crested by payrolls data on Friday that could sway expectations about the timing of future interest rate hikes and spark volatility in record-high stock prices. Fresh data about employment and consumer confidence could help investors solidify expectations for a December interest rate hike from the U.S. Federal Reserve, or lend weight to a minority of strategists predicting a rate rise as early as next month. Fed Chair Janet Yellen said the case for a rate hike is strengthening, but she left open the timing of what would be the first increase since December 2015.
By David Chance WASHINGTON (Reuters) - For all the talk of a radical shift in central banking policy, from the permanent use of negative rates to helicopter money drops, Federal Reserve Chair Janet Yellen appears to believe she can tackle any future downturn using the tools currently at her disposal. Speaking in Jackson Hole, Wyoming, on Friday after a Fed policymaker and other economists proposed a radical overhaul of central banking, Yellen argued that bond purchases and the ability to pay interest on excess reserves as well as forward guidance would be enough to combat any downturn. "Our current toolkit proved effective last December (when the Fed raised rates)," Yellen said in a speech in which she firmed up expectations of a second rate rise from the Fed, possibly as soon as September.