Interest rates may be about to raise, as per a recent speech from Federal Reserve Chair Janet Yellen on Friday, May 22 to the Providence Chamber of Commerce.
Yellen spoke of the Central Bank positioning itself to raise interest rates before the year is done. This is a move that will align with the US economy recent waining of its anticipated bounce back from a slump that happened early in the year. The waining has occurred not only within the US but abroad too.
The speech from Yellen was to a business team in Providence, Rhode Island. Yellen explained that increasing the interest rates would be a move toward nudging skeptical investors to come to terms with what is sure to happen. What is sure to happen is that there will soon be an end to the low-interest rates. The near-zero rates have been ongoing for about six-and-a-half years now.
Yellen stressed that it will be a positive move to raise rates as the economic future looks promising. While the slowdown has been occurring around the globe, Yellen says she expects the US and global economies to become stronger in the near future.
Of course, as the Chair cautioned, making such predictions can be difficult, and it will be affected by factors such as inflation and employment. While the labor market is improving, it is doing so at a very slow pace. And, stock prices are mostly flat at the moment.
As for when exactly the federal funds rate hike will occur, no exact date has been given yet. Many investors speculate that September will be the month of choice for making the move. While the economy is improving in the US at a sluggish rate, it is getting better, and the Fed will raise rates when the timing is right. When exactly that is will be this year but the month is anyone’s guess. Stay tuned.