Chairwoman of the Federal Reserve Bank Janet Yellen signaledFriday morning that the Fed will likely raise interest rates inMarch if economic data holds up.
The Fed announced in late February that it would not raise ratesin the near future. The central bank said the committee decided to “maintainthe target range for the federal funds rate at 1/2 to 3/4 percent.”Fed economists stated the decision to keep the funds rate steadycame after the economy did not meet the goal of 2 percent inflationset last December.
Yellen’s comments Friday, however, illustrate that the Fed couldbe rethinking its approach.
“At our meeting later this month, thecommittee will evaluate whether employment and inflation arecontinuing to evolve in line with our expectations, in which case afurther adjustment of the federal funds rate would likely beappropriate,” Yellen told reporters Friday in Chicago.
The fed is concerned about the federal funds rate, which is theovernight rate on loans between banks. It is effectively the singlemost influential interest rate in the U.S. economy, as it haswidespread affects on domestic monetary and financial conditions.The fed rate bears on employment, economic growth, and inflation.(RELATED: BREAKING: Fed Not Raising,Continuing To ‘Monitor’ Market Conditions)
The Fed’s decision will likely come at around the same time theLabor Department releases its monthly non-farm payrolls report onMar. 10. Traders are betting at 3-to-1 odds that the Fed will raiserates next month, Reuters reports.
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