Federal Reserve Chair Janet Yellen said the case to raise interest rates is getting stronger as the US economy approaches the central bank’s goals, Bloomberg reported.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” she said in the text of a speech Aug. 26 to central bankers and economists in Jackson Hole, Wyoming.
She also said the economy is “nearing” the Fed’s goals of full employment and stable prices. The Fed chair didn’t discuss the specific timing of a rate move in her first public comments since June.
The Federal Open Market Committee raised its target for the federal funds rate to a range of 0.25 percent to 0.5 percent in December, after keeping the benchmark near zero for seven years.
“While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market,” Yellen said at the Kansas City Fed’s annual conference.
“Looking ahead, the FOMC expects moderate growth in real gross domestic product, additional strengthening in the labor market, and inflation rising to 2 percent over the next few years,” Yellen said in her prepared remarks.
“Based on this economic outlook, the FOMC continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives,” she said.