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November 17, 2016

Yellen says Fed may hike interest rates ‘relatively soon’

Alaric Securities

Doing little to dispel expectations of a hike as early as next month, Federal Reserve Chairwoman Janet Yellen on Thursday said an interest-rate hike could come “relatively soon.”

Ahead of an appearance before the Joint Economic Committee, Yellen said progress in the labor market has continued and that economic activity has picked up from the modest pace seen in the first half of this year.

Inflation, while still below the central bank’s 2% objective, has increased somewhat, Yellen said.

Yellen added the central bank continues to expect that the evolution of the economy “will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability.”

Stock futures had little immediate reaction to the testimony. On Wednesday, the Dow Jones Industrial Average DJIA, +0.14%   finished at its third-highest level ever.

One item that may come up in the hearing is how the economy could be changed by the proposals of President-elect Donald Trump. On the campaign trail, Trump has raised the possibility of tax cuts, increased infrastructure spending and tariffs against China and Mexico. Yellen has avoided directly commenting on any candidate’s plan.

Article and media originally published by Steve Goldstein at