Yellen Says Low Inflation Could Lead to Slower Pace of Rate Rises

By David Harrison Features Dow Jones Newswires

Federal Reserve Chairwoman Janet Yellen on Tuesday defended the central bank's projection for a gradual path of interest-rate increases over the next few years even though she said low inflation, if it persists, could lead to a slightly slower pace of rate rises.

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Ms. Yellen and her colleagues have been grappling with subdued inflation growth for much of the year despite a growing economy and vigorous labor market. That has presented officials with a dilemma. From one point of view, the weak inflation readings could be a sign that interest rates should remain lower than anticipated. Yet keeping interest rates low for too long could cause inflation to grow too rapidly and inflate new financial bubbles.

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Write to David Harrison at david.harrison@wsj.com

(END) Dow Jones Newswires

September 26, 2017 13:01 ET (17:01 GMT)