Federal Reserve Chair Janet Yellen claimed that the U.S. central banks are going to stick to interest rates increases. Their actions received validation from a reinforced labor market, robust growth of the national economy, and healthy global finances. As a consequence, Yellen admitted to disappointment when it came to current lower inflation than expected.
Janet Yellen Reportedly Aims at a New Career Direction as the Head of Central Bank
On Sunday, Janet Yellen updated the current national economic situation during the Group of Thirty’s Annual International Banking Seminar in Washington. Under the pressure of weak data, the Federal Reserve Chair claimed that 2018 would record better results.
“My best guess is that these soft readings will not persist, and with the ongoing strengthening of labor markets, I expect inflation to move higher next year.”
Yellen is currently under a lot of pressure. Even though her term wears off in February, she has bigger plans to achieve. She is presumably featuring on the short list of candidates President Donald Trump consults for the position in charge of the central bank.
Yellen has high chances to make a strong impression on the President of the United States. She proved great determination in steering the global financial crisis towards recovery. On the other hand, she couldn’t quite deliver Fed’s goals. The current status indicates a lower inflation than the 2% desired results.
The Lower Inflation Falls Below the Expected 2% Objective
As of August, inflation got stuck at 1.3% even though the report cast volatile factors such as fuel and food aside. The negative direction remained consistent for months. Yellen’s career will continue uncertain for the near future as well. Price fluctuations and seasonal adjustment issues are going to inject data through the end of the year with uncertainty.
Meanwhile, employment exceeded Fed’s expectations. The unemployment rate resumed its pre-crisis dimensions where 4.2% of U.S. population filed for unemployment benefits. Therefore, the labor market continues to build a booming economy on its current stabilization. On the other hand, wages show no signs of improvement.
If national economy and labor market continue their ascending, the inflation is bound to strengthen. Officials expect a new increase by the end of 2017.
Image source: 1