Janet Yellen: ‘Very Possible’ the Fed Has Made Its Last Rate Hike of This Cycle”

via CNBC:

  • Former Federal Reserve Chair Janet Yellen thinks the central bank may have implemented its last rate hike of this cycle.
  • A faltering global economy whose weakness spills over into the U.S. could push the Fed into a prolonged pause, she told a gathering of retailers in New York.

The Federal Reserve already could be at the end of its rate-hiking cycle, Janet Yellen, former central bank Chair Janet Yellen said Monday.

“If there is a downturn in the global economy and that spills into the U.S. … It’s very possible we may have seen the last interest rate hike of this cycle,” she said at the National Retail Federation’s annual Big Show event in New York.

If Yellen is accurate, her views would fit into the market’s thinking but would be contrary to expectations from Fed officials themselves.

According to the most recent projections from individual members of the policymaking Federal Open Market Committee, there are two rate hikes likely this year and perhaps one more after that. Those expectations come after a 2018 during which the Fed hiked its benchmark rate four times to a target range of 2.25 percent to 2.5 percent.

The Yellen Fed began the current rate cycle, hiking the benchmark federal funds rate once in 2015, again in 2016 and then three more times in 2017. President Donald Trump opted not to nominate her for another term, and the current chairman, Jerome Powell, took over in February 2018.

“Perhaps another rate hike or two is perfectly possible, but nothing is baked in,” Yellen said during her comments to the retailers.

 

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