Yellen: Rate hikes appropriate in coming months

Janet Yellen, the Chair of the Board of Governors of the Federal Reserve, said on Friday at Harvard that is it appropriate to raise rates in the coming months and boosted the US dollar in the currency market. “It’s appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time”. She reiterated a gradual hike trajectory as economic growth does not pick up. 

She characterized as “miserable” the pace of recent productivity growth and noted that there has not been an improvement in wage growth. On the positive side, Yellen explained that labor market has improved while participation rose. 

Regarding inflation, she noted that it is below the Fed’s target but expects it to rise toward the objective overt the next couple of years.