The Fed Raises Rates and Lowers the Dollar
December 13, 2017
The regulator noted strong growth in economic activity, moderate household spending growth, strengthening capital investment, improved labor market conditions with inflation below the 2% target. Inflation expectations are low. Hurricanes did not cause serious damage to the country’s economy.
In the future, the labor market will maintain its strong trends for several years, and inflation will remain below 2% in the short term.
According to Federal Reserve Chair Janet Yellen, economic activity in the US will continue at a moderate growth rate. Trump’s tax reform could give momentum to the upward movement, but macroeconomic prospects remain unclear.
According to Yellen, inflation has declined due to temporary factors, but not all reasons are well understood. Wages are growing at a moderate pace due to slow labor productivity growth. However, the inflation target will not be changed.
Janet Yellen’s Speech on December 13: Full Article
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Janet Yellen (English: Janet Louise Yellen; born August 13, 1946) has been serving as the chair of the Board of Governors of the Federal Reserve System since February 3, 2014, succeeding Ben Bernanke. Throughout her political career, she has held several important positions, including working at the Federal Reserve Bank of San Francisco since 2010. She is the ideological author of the QE program, so Janet Yellen is considered a strong advocate of financial stimulus for the US economy.
Each speech by Janet Yellen is significant for the market, as it contains the main premises for the regulator’s future monetary policy, and therefore, indicates the direction of the dollar‘s movement. Therefore, speeches by Janet Yellen are often accompanied by high trading activity among participants ready to react instantly to the words of the Fed Chair.
Previous Speeches by Janet Yellen
- The Fed Raises Rates and Lowers the Dollar
- One Key Factor from the Fed Caused a 1.5% Drop in EUR/USD
- How to Make the Dollar Rise? Ask Yellen to Give a Speech
- The Fed Fooled Market Expectations and Supported the Dollar’s Rise
- Why Did the Fed Meeting Results Disappoint the Markets and Crash the Dollar?
- What Did Yellen Say and Why Did the Dollar Fall?
- How Yellen’s Speech Led to the Drop in EUR/USD
- Yellen’s Speech Led to the Dollar’s Rise
- Fed Meeting on December 14: Better Than Expected, But Something Is Wrong
FAQ
What impact does Janet Yellen’s speech have on the market?
Janet Yellen’s speeches are crucial for the market as they outline the Fed’s future monetary policy, influencing the dollar’s movement.
Why was inflation below the target during her speech?
Inflation was below the 2% target due to temporary factors, though not all reasons were fully understood.
How does the Fed’s decision affect the dollar?
The Fed’s decisions, such as raising interest rates, can influence the dollar’s value, either strengthening or weakening it based on market expectations.
