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Yellen: Fed rate hike may be needed to prevent economy from 'overheating' Brian Cheung
U.S. Treasury Secretary (((Janet Yellen))) said this week that the Federal Reserve may have to raise interest rates in the future to cool off an economy moving too fast.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy,” Yellen said in a taped interview with The Atlantic, which aired Tuesday. (Pre-Scripted Talking Points - Rolled out by Leftist Atlantic to assist Dementia Joe).
Yellen’s remarks apply some pressure on the central bank, which has insisted that it is not “thinking about thinking about” raising short-term interest rates from near-zero.
Fed Chairman Jerome Powell said last Wednesday that the economy appears a “long way” from its goals of maximum employment and inflation “moderately” overshooting its 2% target.
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Yellen, who was Powell’s predecessor at the head of the central bank, elaborated that higher interest rates would help “reallocate” economic resources as the Biden administration prioritizes its many proposed spending measures.
The administration has been moving forward on its multi-trillion dollar infrastructure bill.
“These are investments our economy needs to be competitive and to be productive,” Yellen said.