Yellen to meet Congress during growing uncertainty over Fed's rate policy
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Yellen to meet Congress during growing uncertainty over Fed’s rate policy
Since the Federal Reserve raised rates from record lows in December, the economic landscape has become clouded by falling stock markets, global weakness and sharply lower energy prices. It is against that backdrop that Fed Chair Janet Yellen will visit Congress on Wednesday, and lawmakers are likely to want to question the Fed chief about the probable pace of further rate hikes and the Fed’s role in supporting the U.S. economy. It’s unclear how much Yellen will say about the likely timetable for rate increases. Prior to her meetings with Congress, some analysts said they think her testimony will echo comments of the Fed’s Vice Chair Stanley Fischer.
If these developments lead to a persistent tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States.
Stanley Fischer, Fed vice chair
Yellen and other Fed officials have stressed that their decisions hinge largely on the latest economic data. Much of that data since December has been tepid: Manufacturing has slumped, corporate profits are down, business stockpiles are up, and shrunken oil prices have squeezed energy companies. Meanwhile, the job market — the most vital part of the economy — remains solid. Worker pay is even starting to show its first significant gains since the Great Recession ended 6½ years ago.
