Federal Reserve Chairwoman Janet Yellen said on Friday that the Federal Open Market Committee (FOMC) expects the U.S. economy to continue its moderate growth and foresees inflation rising to 2% over the next few years.
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"While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market,” Yellen said in a speech in Jackson Hole, Wyoming.
Former Obama economic advisor Austan Goolsbee told FOX Business Network’s Stuart Varney that the Fed’s mistakes in its rate increase forecast thus far, along with incoming economic data, may cause Republican presidential candidate Donald Trump to see a boost in the polls.
“Everyone knows the Fed has been making mistakes, mistakes in its forecast, mistakes in predicting ah we are going to raise the rates – [they’ve said] we are going to be able to raise the rates by the end of this year, by the end of next year, by the end of the year after that,” Goolsbee said.
Goolsbee also said the Fed consistently continues to predict rate hikes despite the economy not being strong enough for such rate hikes to be implemented.
“That’s what the Fed has been saying for six, seven straight years; that we get modest growth numbers and then they say, ‘ah we are about to blow the doors off, we are about to raise rates,’ and then they are never able to do that because the economy is not strong enough,” he said.