Federal Reserve Chair Janet Yellen told Congress today that an interest rate hike in March remains on the table, pushing back against market expectations that the Fed will stand pat, USA Today reports.
“Precisely when we take an action—March, May or June—I can’t tell you,” Yellen told the Senate Banking Committee. “I would say every meeting is live.”
Fed fund futures say there’s just an 18% chance of a rate increase in March, versus about 50% in June. The Fed raised its benchmark rate by a quarter percentage point in December to a range of 0.5% to 0.75%. That was its first hike in a year.
In December, Fed policymakers forecast three rate increases in 2017, up from its estimate of two bumps in September, citing an improving economy and labor market.
San Francisco Fed President John Williams recently suggested a March increase is a possibility. And Chicago Fed chief Charles Evans, typically a “dove” who prefers to keep rates low to spur growth, said he officially predicted two rate hikes but could be comfortable with three moves.
Yellen also reiterated that Fed policymakers continue to expect gradual rate increases amid a moderately expanding economy and inflation that should slowly rise to the Fed’s annual 2% target.
