WASHINGTON – The chairwoman of the United States Federal Reserve, Janet Yellen, said on Wednesday that increasingly widespread growth makes gradual interest-rate hikes appropriate.
“The economic expansion is increasingly broad-based across sectors as well as across much of the global economy,” Yellen said in testimony to a joint congressional panel.
It could be the final time she delivers those mandatory biannual remarks to the US Congress Joint Economic Committee since President Donald Trump’s nominee to replace her as Fed chair, Jerome Powell, is expected to take the helm in February 2018.
Referring to how the improved economic outlook would affect monetary policy, Yellen said the Federal Reserve continues to believe that “gradual increases in the federal-funds rate will be appropriate to sustain a healthy labor market and stabilize inflation around (the Fed’s) 2 percent objective.”
The federal-funds rate is currently at a range of between 1 percent and 1.25 percent.
The central bank is expected to raise that benchmark rate by one quarter of a percentage point at its last policy meeting of 2017, which is scheduled for Dec. 12-13.
Yellen made her remarks shortly after the Commerce Department upwardly revised third-quarter economic growth to 3.3 percent, up from 3 percent in its initial reading and the fastest year-over-year quarterly pace of expansion since 2014.