Newsroom

May 27, 2016

Yellen sees rate hike in 'coming months'

Federal Reserve Chair Janet Yellen told audience at Harvard University Friday that it would be "appropriate" for the Fed to raise interest rates again "in the coming months."

"It's appropriate, and I've said this in the past I think, for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate," Yellen said when speaking at a panel discussion at the Radcliffe Institute for Advanced Study.

Yellen also noted the recent pick up of gross domestic product growth, and she reiterated her expectation that inflation will reach target levels in the next few years.

"A number of Fed officials have indicated that the Federal Open Market Committee's next rate hike could come as early as June," said NAFCU Chief Economist and Director of Research Curt Long. "While Chair Yellen seemed to have a slightly larger window, her comments suggest that barring an economic downturn, a rate hike is likely to occur in June or July."

After the close of its meeting in April, the FOMC left the federal funds target rate unchanged at a range of 0.25 to 0.5 percent. The FOMC raised the federal funds target rate a quarter point to this range in December.​