Yellen Says Fed Will Increase Rates Slowly

Old_Joe

"WASHINGTON — Janet L. Yellen, the Federal Reserve chairwoman, said on Friday that the Fed planned to raise interest rates more slowly than during past recoveries because of the unusually fragile condition of the American economy.

Fed officials, who have held short-term interest rates near zero for more than six years, have indicated that they plan to start raising short-term rates later this year. Ms. Yellen’s remarks, delivered at a conference in San Francisco, are part of an effort to prepare markets for the end of that prolonged era.

And her message was that the return to normal conditions is likely to be very slow."

Sven

The month of June is still on the table, but it is likely to be on the latter half of 2015. More importantly is how fast the increase is. Note that interest sensitive sectors including REITs have responded quickly this week.

Tampabay

Never seen them (rates) raise "Quickly" but she's older than me so maybe she has? ....can't wait for "normal"

Sven

If the past is any indication of the future, typical rate of increase is 25 basis point. CPI is one of the indicator for inflation the Fed uses and the number is tame. So it is likely to be small and extended over several years unless inflation accelerates.