Federal Reserve Chair Janet Yellen said the case to raise interest rates is getting stronger as the U.S. economy approaches the central bank’s goals.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” she said in the text of a speech Friday to central bankers and economists in Jackson Hole, Wyoming.
She also said the economy is “nearing” the Fed’s goals of full employment and stable prices. The Fed chair didn’t discuss the specific timing of a rate move in her first public comments since June.
The Federal Open Market Committee raised its target for the federal funds rate to a range of 0.25 percent to 0.5 percent in December, after keeping the benchmark near zero for seven years.
Despite their repeated intentions to raise the rate again, officials have skipped a hike at all five meetings this year, and futures markets have priced in about a 30 percent chance of another hike at the Sept. 20-21 policy meeting, the second-to-last gathering before presidential elections in November.
“While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market,” Yellen said at the Kansas City Fed’s annual conference, the title of which is “Designing Resilient Monetary Policy Frameworks for the Future.”