When will the Fed raise rates? The Fed is not sure yet
The Fed, as the nation’s central bank, is not quite sure how much longer it will raise interest rates.
While the Fed’s policy-setting committee meets this week, the committee has said it will take several weeks to get a clear picture of what will happen with the economy.
The Fed’s three-member board of governors, known as the Open Market Committee, has yet to vote on any changes to its policies, which the Fed is mandated to keep secret.
And the committee’s chairman, Janet Yellen, has said that her panel will make no decisions until the Fed has released its fourth annual report in late May.
In addition to a decision on rate hikes by the Fed, the panel is expected to consider the possibility of raising rates another time.
On Thursday, Yellen gave the first indication of when the Fed might act.
Speaking to reporters on a conference call, she said the committee would take “a long, long time” to come to a final decision.
While the Fed did not provide any details on its thinking on how to act, the statement said that it “may consider actions that may be appropriate to respond to the economic challenges of the future.”
The Fed also could consider other measures, such as buying government securities and raising interest rates to prevent the economic drag of a recession.
In addition, Yellin said, the Fed could consider easing its policy of keeping its benchmark overnight rate low and holding its benchmark rate steady at zero, as well as its policy to delay the start of its first rate hike in more than two decades.
Yellen made no mention of the potential impact of a potential rate hike.
Yellins statements indicate that the Fed wants to avoid another Great Recession.
The Fed has said the current economic conditions require it to hold its benchmark interest rate below zero for at least another year.
But the Fed also said in March that it is prepared to wait until the economy improves in the second half of 2019 to raise rates.
Although Yellen has said she would not take any action until the committee released its next report, she did say that the committee is considering a variety of measures.
The committee also is considering measures to boost economic activity, such, for example, expanding its efforts to attract more people and firms to the economy through better job training programs.
Yellen also said that the board will consider further actions to lower unemployment and spur job creation, such if needed.
But Yellen did not address the possibility that the Federal Reserve might delay the first rate increase in more then a year, if the economy falters.
YELLIN ON THE REPEAL OF THE LEND-OUT ACT, THE FED AND THE BOARD OF GOVERNORS The Fed has previously signaled that it may delay the rate hike by two months, if it sees an economic downturn.
But its decision on when to start raising rates comes amid a global economic slowdown.
Last week, Yelins predecessor, Ben Bernanke, told the Senate Banking Committee that he thinks it would be appropriate for the Fed to delay a rate increase until after the next inflation report in mid-May.
Yelens testimony was met with skepticism by Democrats, who said he was being vague and overly optimistic about the economy’s recovery.
But Bernanke also told the committee that he believes that the recovery is already strong enough that the economy will rebound fully in the coming years.
And Yellen told the Fed that inflation is currently below its long-run target of 2 percent.
But she added that she believes the economy is moving in the right direction, as inflation is running at below 2 percent and unemployment is running below 7 percent.
Bernanke said inflation has been running below 2% for more than a year.
“We have not experienced the great inflation and unemployment that we should expect in the long run,” he said.
On Thursday, Bernanke told lawmakers that he does not believe inflation is near that level.
“The economy is now in an environment that is more like the late 1970s than the mid-1970s,” Bernanke testified.
But Bernanke has repeatedly said that he would be willing to extend his Fed chairmanship until inflation is at a level he deems sustainable.
And Yellen said on Thursday that the unemployment rate is “unacceptably high” and that the current unemployment rate could be as high as 20 percent.
At the same time, Bernacketts view of inflation is not as dire as some members of Congress.
Bernicketts economic adviser, Michael Feroli, told The Hill that Bernanke is “right” to raise interest rate targets, as long as inflation remains below 2%.
“Inflation is not a big concern,” Feroli said.
“I don’t think inflation is out of control.”
Bernanke’s comments on Thursday were met with criticism from Republican lawmakers, including Sen. Jeff Sessions, the Alabama Republican who chairs the Banking Committee.
He said Bernanke should not be doing so “as if we