Yellen backs ‘gradual’ rate hikes, says U.S. is not in a bubble

Wall Street Journal ^ | Apr 8, 2016 | Michael S. Derby

[expat_panama]

NEW YORK — Federal Reserve Chairwoman Janet Yellen offered an upbeat view of the U.S. economy Thursday and affirmed the central bank’s next step is likely to raise interest rates.

But the central-bank chief didn’t say when she wants the Fed to boost borrowing costs again.

“We think a gradual path of rate increases will be appropriate” given the progress the economy has made and is likely to continue to make, Yellen said as part of a panel discussion involving all the living chairs of the Federal Reserve past and present. She was joined on stage at the International House in New York by Ben Bernanke and Paul Volcker, while Alan Greenspan joined by video link.

For the economy, “we remain on a reasonable path,” Yellen said. When asked whether the central bank should have raised rates as it did at the close of 2015, Yellen responded, “I don’t think December was a mistake.” Yellen: U.S. Not a 'Bubble Economy'(2:33)

At a panel discussion Thursday evening at International House in New York with predecessors Ben Bernanke, Alan Greenspan and Paul Volcker, Federal Reserve Chairwoman Janet Yellen rejected the view that the U.S. is “a bubble economy.” Photo: Getty Images

Yellen said the economy has shown a lot of improvement in hiring, with the current jobless rate of 5% close to the full employment, which suggests the further that measure goes down, the more likely inflation pressures are to build. Yellen said weak inflation is due to transitory factors that are likely to subside, and she said she expect price pressures to continue to tick higher.

[expat_panama]

Related story:

Trump: Markets in a 'big, fat, juicy bubble'

Jacob Pramuk | @jacobpramuk

Monday, 8 Feb 2016 | 1:31 PM ETCNBC.com

 

"I hope I'm wrong, but I think we're in a big, fat, juicy bubble," the Republican presidential candidate said on CNBC's "Power Lunch."

Major U.S. stock averages were down more than 2 percent each Monday afternoon, continuing a rocky year in which the S&P 500 has fallen 10 percent. Fears about slowing growth in the United States and around the globe have contributed to the recent selling.

Trump, who was in New Hampshire ahead of Tuesday's primary voting, criticized the state of the economy and touted his plans to trim U.S. tax rates and increase competitiveness with China, which has had recent problems of its own.

 

 

[Sacajaweau]

Would the government lie to us?

[LegendHasIt]

"Yellen ... says U.S. is not in a bubble"

That part's true: We are not in a bubble. We are in a whirlpool.

[dljordan]

“Would the government lie to us?”

Yellen isn’t the government. She’s the figurehead for a cabal of banks that actually own the U.S. The government and it’s minions work for them

[dp0622]

Gadzooks!!! the SP500 ratio P/E average is almost 24!!!???

shouldn’t that be around 16 to 18?

[Flick Lives]

Years ago I heard a book review where the writer said that when you hear the words “Federal Reserve”, think “Banking Cartel”. It makes the Fed’s actions much more understandable.

[dp0622]

of course jan 2009 it was 71!!!!!

unless i’m reading wrong, that seems IMPOSSIBLE!!!!

I don’t think 23 is a huge bubble, but a correction could be in order.

[Travis McGee]

[Popman]

Not knocking Trump, but anybody who is even mildly paying attention to the financial condition of the country already knows what he said is correct...

Kudo for him for saying it...

[Popman]

+ 1

[shelterguy]

“”””””Yellen ... says U.S. is not in a bubble”

That part’s true: We are not in a bubble. We are in a whirlpool. “”””

Actually we are about a foot and a half away from the waterfall.

[VideoDoctor]

Trump is right. There is a BUBBLE.

It will be denied.. until it explodes.. then there will be many explanations as to what occurred. By then the MONEY will be gone with the wind.

They have Yellen in charge because she's the kindly "Old Grandmother" who no one directly questions or attacks.

If you listen to her at press conferences and listen to the preplanned questions that she's asked you would think she has the same handlers as Hillary Clinton.

My point: She TALKS more BS than Greenspan and Bernanke put together.

She's the MONEYHANDLERS current firewall.

[Lumper20]

When one touts a jobless rate of 5% while some 20% of the workforce is not even looking for a job, I refuse to listen to her. Furthermore, her application of so called monetary policy is a one way street to always create more money supply by printing more dollars and buying more Freddie Mac and Fannie Mae mortgages. Apparently she learned zip during the crash about the CRA and the loans of Freddie and Fannie. Now we have HARP loans plus more Fannie and Freddie. This Keynesian econ of hers makes little sense to me. Her money and banking policy does nothing to lower the debt or encourage savings. In fact, she is instrumental in increasing the debt and spending while low rates encourage borrowing and not savings.

[MarkL]

Of course we are, due to the fact that the US (and I believe the rest of the world as well) is in a cash bubble.

Most people never realize that the reason costs continually go up, especially recently is just that reason. “Money” is being created as such a high rate that the value of each dollar is diluted. This is the reason your “Dollar Menu Items” at McDonalds is now costing you between $1.25 & $1.50.

Mark

[doldrumsforgop]

that woman is the most deer-in-the-headlights person I have seen since Governor Kathleen Blanco of Louisiana immediately following Katrina.

[jsanders2001]

> "Yellen ... says U.S. is not in a bubble" That part's true: We are not in a bubble. We are in a whirlpool.

^ it sure seems like it despite what the ValJar propagandists and their spokespersons say...

[libertylover]

Is a bubble kinda like deep-do-do?

[DIRTYSECRET]

Let’s see: Hillary gets elected because women think Trump/Cruz will approve of raping women and making them keep their babies. The next day the markets crash and a series of small 911 attacks occur throughout the country. We are toast. At least they will be free to blame Bush/Obama. Plus they will reassure us that they can ‘fix it’.

It’s sad to think that the big market correction should come in October.

[Don Corleone]

We NEED the Federal Reserve like we need an Ebola epidemic.

[upchuck]

5% unemployment? That depends on how you cook the books.

US not in a bubble? IMHO, Yellen is in a bubble.

Look at the Labor Participation Rate. Up a little recently but still in a long term downward trend.