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Yellen Sees Gradual Rate Hikes Ahead

The Federal Reserve chair said Sunday she expects inflation to pick up in 2018 after showing some signs of softness over the past several months.

By Paul Bubny | paulbubny | Updated on October 16, 2017

Photo of Janet Yellen Federal Reserve chair Janet Yellen

WASHINGTON—A course of gradual increases in the federal funds rate will help sustain a healthy labor market and stabilize inflation, Federal Reserve Chair Janet Yellen said Sunday.  Speaking to the International Banking Seminar here, Yellen said she expects inflation to pick up next year after lagging projections over the past several months both domestically and globally, and to reach 2% by 2019.

Noting that the Federal Open Market Committee has continued its policy of gradual policy normalization, Yellen reiterated that the FOMC has initiated its balance sheet normalization program. The program, announced in June, “will gradually scale back our reinvestments of proceeds from maturing Treasury securities and principal payments from agency securities.”

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