Yellen Says ‘The Case…Has Strengthened,’ In Support Of A Rate Hike, But Remains Vague On Timing
The likelihood of a rate hike this year "has strengthened," Fed Chair Janet Yellen said during her speech at the Federal Reserve’s Jackson Hole meeting this morning.
Stocks have been trading low all week awaiting Yellen’s much-anticipated remarks as investors hoped to get clues about whether the tentative interest rate hike in September could become a reality. It seems Yellen’s speech did the trick, as investors sold stocks and government bonds in haste Friday following her remarks, the Wall Street Journal reports.
“I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen said, though she remained vague on timing, CNN reports. Economists remain divided as to whether a rate hike will occur before the end of the year—especially taking into account the uncertainties brought on by the presidential election.
Georgia State University economist Rajeev Dhawan told Bisnow we likely won’t see an increase in rates until next year. Rajeev is convinced the country’s GDP levels are anemic, due in large part to a lack of investments in corporate, energy and tech.
“According to my read of the economy, the GDP numbers and job growth I see at the moment is down, not up,” Rajeev said. “In my forecast, the Fed is not going to raise rates until next year.”