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Eyes and ears were on Janet Yellen Thursday morning as she gave her congressional testimony in Washington to see how she would respond to Donald Trump’s victory and what it means for monetary policy.
But the Fed Chair made no mention of Donald Trump's election, nor of his prospective policies and Fed official's continued need to defend their independence from political influence.
Yellen did, however, gently signal that central banks are close to increasing rates with the health of the labor market and inflation inching up higher. Yellen says a rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Bloomberg reports.
It comes as no surprise that Yellen did not speak on Trump's victory. Every Fed official who has spoken publicly so far—at least nine regional bank presidents and Fed governors —have said they’re unsure of how Trump will impact the outlook of the economy because they don’t know which policies he will actually pursue.
Yet several officials have hinted that expansionary fiscal policy might give the Fed license to increase rates. Despite all the uncertainty, there is one thing that is nearly certain—an incoming December rate hike. [Bloomberg]
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