Fed Chairwoman Janet Yellen said last week she doesn’t think growth will overheat the U.S. economy, suggesting she’s in favor of raising rates slowly over the course of the year.
Her comments are contrary to the beliefs of many investors, who fear President Donald Trump will promote policies that will drive growth so quickly the Fed may need to step in and raise rates more quickly and steeply than they otherwise would, the Wall Street Journal reports. Despite Trump’s plans to cut taxes and increase infrastructure spending, Yellen said the economy is constrained by long-term forces.
While citing an aging population, rising rates and weak foreign demand as forces that might keep the U.S. economy from overheating, Yellen said the Fed will need to be alert and raise rates if inflation starts to get out of control. [WSJ]
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