Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Yellen: Job market makes Fed hesitant on rate hike  Join our daily free Newsletter

MENAFN - Arab News - 23/08/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab News) WASHINGTON: Federal Reserve Chair Janet Yellen said Friday that the Great Recession complicated the Fed's ability to assess the US job market and made it harder to determine when to adjust interest rates.

Yellen's remarks to an annual Fed conference in Jackson Hole Wyoming offered no signal that she's altered her view that the economy still needs Fed support from ultra-low interest rates. The timing of a Fed rate increase remains unclear.

The Fed chair noted that while the unemployment rate has steadily declined other gauges of the job market have been harder to evaluate and may reflect continued weakness. These include high levels of people who have been unemployed for more than six months many people working part time who would like full-time jobs and weak pay growth.

Yellen repeated language the Fed has used at its last meeting that record-low short-term rates will likely remain appropriate for a "considerable time" after the Fed stops buying bonds to keep long-term rates down. The Fed's bond buying is set to end this fall.

But Yellen said the Fed's rate decisions will be dictated by how the economy performs.

"Monetary policy is not on a preset course" she said. The Fed "will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy."

Yellen also suggested that pay gains which have been sluggish since the recession ended five years ago could rise faster without necessarily igniting inflation.

John Silvia chief economist at Wells Fargo said Yellen's remarks confirmed his view that the Fed's first rate increase will occur next June.

"Yellen still wants more time to evaluate the data" he said.

Silvia also said the speech hints that the Fed is "willing to take a little more inflation to achieve their labor market goals." If inflation were to top the Fed's target of 2 percent "I don't think they're going to panic."

Yellen delivered her remarks at the opening of the annual conference sponsored by the Kansas City Federal Reserve Bank at a lodge with a backdrop of the Grand Teton Mountains. This year's conference is devoted to the subject "Re-evaluating Labor Market Dynamics" and Yellen's comments addressed the difficulty the Fed faces in trying to determine how much weakness remains in the job market given changes caused by the 2007-2009 recession.

She noted "considerable uncertainty about the level of employment consistent with" the Fed's goal of maximum employment and stable prices.

Paul Dales senior US economist at Capital Economics wrote in a research note Friday that "despite the fasterthan-expected decline in the unemployment rate Yellen does not appear to have changed her view that there is still 'significant' slack in the labor market."


Yellen's comments came two days after release of the minutes of the Fed's July 29-30 meeting. Those minutes showed that officials engaged in an intensifying debate over whether to raise rates sooner than expected if the economy keeps strengthening.

Some officials the minutes said thought the Fed would need "to call for a relatively prompt move" to begin raising short-term rates from record lows where it has kept them since the financial crisis struck in 2008. Otherwise they felt the Fed risked overshooting its targets for unemployment and inflation.

In the end the Fed made no changes at the July meeting. It approved 9-1 maintaining its current stance on rates. But the minutes pointed to a distinct division among officials over the timing of an increase.

That debate has continued at Jackson Hole with Fed officials expressing clashing views during a series of TV interviews before the conference began with a reception and dinner Thursday night.

Charles Plosser president of the Fed's Philadelphia regional bank said he was uncomfortable with the Fed's current policy statement that it expects to keep its key short-term rate unchanged for a "considerable time" after its bond purchases end. Plosser cast the lone dissenting vote at the July meeting.

In an interview with CNBC Plosser said he felt the Fed was "running a very risky policy" given the steady signs of strength in the economy.

"I would prefer to begin raising rates sooner and raise them more gradually" he said.

Esther George president of the Kansas City Fed which sponsors the Jackson Hole conference said in an interview on the Fox Business Network that she also thought the Fed needed to "begin sooner rather than later" raising rates to give the economy time to adjust after a prolonged period of low rates. George like Plosser is viewed as a "hawk" someone who thinks the Fed should be more concerned about avoiding high inflation than about continuing to try to boost the economy.

John Williams president of the San Francisco Fed said in a separate interview on CNBC that he thought based on his own forecasts of the economy's performance that a "reasonable guess" for the first rate hike would be next summer. But he said that the timing would ultimately depend on economic data and that if the economy accelerates the Fed could act sooner.

Williams has been a supporter of the majority of officials who back Yellen's view that the job market still isn't healthy enough for the Fed to start boosting rates.

 


Arab News




  MENA News Headlines
 May 6 2016 - Air strikes on Syria displaced c killing 28 as Aleppo truce holdsThe Peninsula
(MENAFN - The Peninsula) Syrians carry a giant pre-Baath Syrian flag as they shout slogans during an anti-regime protest in the rebel-held Bustan al-Qasr district in eastern Aleppo on May 5 2016. The ...

 May 5 2016 - Qatar- Ronaldo hails Zidane as Real reach Chions League finalThe Peninsula
(MENAFN - The Peninsula) Real Madrid's Portuguese forward Cristiano Ronaldo controls the ball during the UEFA Champions League semi-final second leg football match Real Madrid CF vs Manchester City ...

 May 5 2016 - Qatar could host Summer Olympics says CoeThe Peninsula
(MENAFN - The Peninsula) President of the International Association of Athletics Federation (IAAF) Sebastian Coe (L) and Presdient of the Qatar Athletics Federation (QAF) Dahlan Al Hamad (R) speak ...

 May 5 2016 - Qatar Aquabike chionship to begin on FridayThe Peninsula
(MENAFN - The Peninsula) DOHA: The third round competitions of Qatar’s Local Aquabike Championship 2016 organized by the Qatar Sailing and Marine Sports Federation (QSMF) will get underway ...

 May 5 2016 - Gulf Air's FalconFlyer and Europcar in dealThe Peninsula
(MENAFN - The Peninsula) Gulf Air and Europcar officials signing the agreement. Manama: Gulf Air the Kingdom of Bahrain’s national carrier yesterday announced a partnership between the ...

 May 5 2016 - Visitors from Qatar to Dubai increase by 26 in Q1 2016The Peninsula
(MENAFN - The Peninsula) Doha: Dubai welcomed 4.1 million overnight visitors in the first three months of 2016 a 5.1% increase over the same period last year backed by strong double digit ...

 May 5 2016 - Joyalukkas wins Best Service Performance Brand awardThe Peninsula
(MENAFN - The Peninsula) Sheikh Mansoor bin Mohammed bin Rashid Al Maktoum honouring Joy Alukkas Chairman Joyalukkas at a function in Dubai. Dubai: The eponymous Joyalukkas Jewellery received ...

 May 5 2016 - Qatar- Real estate deals at QR580.6m in last week of AprilThe Peninsula
(MENAFN - The Peninsula) DOHA: The combined value of Qatar’s real estate transactions during the fourth week of April (from 24-28) amounted to QR580.6m showing over 57 percent growth compared ...

 May 5 2016 - Qatar- SP affirms QIB's long-term ratingThe Peninsula
(MENAFN - The Peninsula) DOHA: S&P Global Ratings has affirmed Qatar Islamic Bank’s (QIB) “A-/A-2” long and short term counterparty credit ratings. QIB’s rating reflects ...

 May 5 2016 - Qatar bourse and Goldman Sachs launch London roadshowThe Peninsula
(MENAFN - The Peninsula) DOHA: Qatar Exchange (QSE) in coordination with Goldman Sachs yesterday commenced in London a roadshow that aims to promote investment in the Qatari companies listed on QSE ...

 May 5 2016 - Vodafone Qatar unveils Connect Plans schemeThe Peninsula
(MENAFN - The Peninsula) Vodafone officials at the launch of the company’s ‘Connect Plans’ scheme at the Four Seasons Hotel in Doha yesterday. Pic: Baher A / The Peninsula ...

 May 5 2016 - Qatar for joint efforts to rejuvenate global economyThe Peninsula
(MENAFN - The Peninsula) Minister of Economy and Commerce H E Sheikh Ahmed bin Jassim bin Mohammed Al Thani with Chairman of the Presidential Council of the Republic of Bosnia and Herzegovina Bakir ...

 May 5 2016 - Philippines' leading airline Cebu Pacific boosts direct service to DohaThe Peninsula
(MENAFN - The Peninsula) DOHA: The Philippines’ leading airline Cebu Pacific (CEB) will add a frequency between Manila and Doha beginning July 9. The only Philippine carrier flying non-stop ...

 May 5 2016 - Qatar Today announces second edition of business excellence awardsThe Peninsula
(MENAFN - The Peninsula) DOHA: Qatar Today has announced the second edition of its Business Excellence Awards. The event being held under the auspices of Qatar Stock Exchange will identify ...

 May 5 2016 - Qatar Chamber participates in food security meetThe Peninsula
(MENAFN - The Peninsula) Sheikh Khalifa bin Jassem bin Mohammed Al Thani (left) Chairman Qatar Chamber at the Food Security Conference held in Fujairah. DOHA: Qatar Chamber (QC) participated ...

 May 5 2016 - KidzMondo set to open at Mall of QatarThe Peninsula
(MENAFN - The Peninsula) Ali Kazma (left) KidzMondo Founder and Nabil Barakat General Manager during a press conference and groundbreaking event of KidzMondo Doha at Hilton Hotel yesterday. Pic: ...

 May 5 2016 - Four wounded after rockets hit Turkey's KilisThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) >Four people including a police officer were wounded after rockets fired from Islamic State of Iraq and the Levant (ISIL)-controlled territory hit the ...

 May 5 2016 - Turkey- Delegation from Turkish opposition party detained in IsraelThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) >A delegation from Turkey’s far-right Great Unity Party (BBP) was detained at Israel’s Tel Aviv airport early on May 5 the party and CNN Türk ...

 May 5 2016 - ISIL must be pushed back in northern Syria: Turkish ministerThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) The Islamic State of Iraq and the Levant (ISIL) must immediately be pushed back from the Turkish border said Turkish Foreign Minister Mevlüt ...

 May 5 2016 - Jordan- Deputizing for King Royal Court chief receives US delegationJordan News Agency
(MENAFN - Jordan News Agency) Amman May 5 (Petra)--Deputizing for His Majesty King Abdullah II Royal Court Chief Fayez Tarawneh on Thursday received a delegation of US congressional aides currently ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help