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Fed chair Janet Yellen says the forces supporting US job growth and inflation will outpace the negative ones, adding that gradual rate hikes are still in store—but the head of the central bank was vague about the timing.
“I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run,” Yellen said in Philadelphia today.
Yellen acknowledged that the May jobs numbers were “disappointing,” but pointed out that the jobs report also showed an increase in hourly earnings, Bloomberg reports. Still, National Association of Realtors chief economist Lawrence Yun told Bisnow that the wage increases are likely due to people dropping out of the labor force.
In March, policymakers projected there'd be two rate increases in 2016, but investors expect just one, based on futures markets. [Bloomberg]
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