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Yellen to Congress: Fed to Continue With Interest Rate Hikes

by Countable | 7.12.17

What’s the story?

Federal Reserve Chair Janet Yellen testified before the House Financial Services Committee today and offered a positive outlook on the U.S. economy and the course of the central bank’s monetary policy: Job growth is strong enough to support continued, gradual hikes in interest rates over the next few years.

Yellen noted inflation is lagging behind the Fed’s target which could cause policymakers to increase interest rates at a slower pace, but that she expects prices to start rising soon.

Why does it matter?

The actions that the Fed takes with respect to interest rates directly impact average people who borrow money to buy houses or cars, finance their education through student loans, or carry a balance on their credit card.

When interest rates rise, that means it will be more costly for borrowers to repay their loans. And while many loans have fixed interest rates, some are variable, which means those borrowers will be spending more to repay their debt in the aftermath of a rate hike.

What can you do?

Ask yourself these questions and then let your reps know what you think: Should the Federal Reserve focus solely on price stability (as this bill suggests) rather than continuing to have a dual mandate to keep prices stable and promote full employment? Should the Federal Reserve be audited?

— Eric Revell

(Photo Credit: Federal Reserve / Public Domain)

Countable

Written by Countable

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(20)
  • Ticktock
    07/12/2017
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    We knew that interest hikes were eventually going to occur. Hikes usually occur early in growth cycles but although employment is strong and the stock market is in positive numbers wages are still stagnant. Just because the number of low paying jobs are growing and stocks are doing well doesn't mean that Jane's personal economy, based on a minimum wage job, isn't doing very well at all. If Jane were making $300,000 per year maybe interest rate hikes would make sense. On a $300,000 per year income she would be involve in the stock market, would be upwardly mobile and her wages would be growing.

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  • Chris
    07/13/2017
    ···

    Rate hikes while national debt is this high is a recipe for massive amounts of defaults and bankruptcies.

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  • JayFeat
    07/13/2017
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    While employment, the stock market, and the economy on a whole are doing better there is still the issue of wage stagnation, particularly in the middle and lower class. And, of course, increased interest rates would impact middle and lower income people a lot more than upper class, who are the ones who are actually seeing an increase in money in their pockets.

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  • Sandra
    07/13/2017
    ···

    There is no reason to raise the federal taxes on loans, again you are only thinking of the rich and the poor suffer again.

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  • Roger
    07/13/2017
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    Hi: the federal reserve should be audited it is not part of our government but we let a bunch of bankers run our monetary system to their benefit. They are globalist! Roger

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  • Langho
    07/13/2017
    ···

    I'm sick of our government I don't give a rats ass about middle and low income people all they care about is the rich and rich is not what made this country and a working man in working woman made this country and it's almost impossible now to go to the grocery store and buy groceries for your family for the week and I want to raise interest-rate or the banks can get fatter piss on them

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  • Langho
    07/13/2017
    ···

    This country is not capable of handling higher interest rates right now at the level of wages that men and women make. There's a very few percentage of rich people in this country compared to lower and middle-class middle class is like lower class now and lower class is like poverty and you want to raise the interest rates.

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  • IllWill
    07/13/2017
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    There's no reason for the Fed to be hiking rates. Wages are still stagnant. More people are getting jobs, but by and large these are low-paid jobs that don't offer many benefits. The Fed even admits that inflation is below target. They need to stop with these rate hikes or they're going to kill off what has already been a very slow recovery.

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  • David
    07/13/2017
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    YES, AUDIT THE FED! The are steeling our money through their inflationary practices. Bunch of thieves.

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  • David
    07/13/2017
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    End the fed. The government does not create wealth. The fed single handily causes inflation which causes lower and middle class wages to become worthless. Banks can't give loans nor have competitive interest on savings but can build a new bank every time you blink. The fed was designed to keep you middle class.

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  • August
    07/14/2017
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    The prime rate is a fine adjustment to the economy. They maxed it out to prevent a depression on 2007. Years later it has been abused by Wall Street to line there pockets. If the economy is doing to improve then why is inflation so low (according to the Govt. ) ? We need new and realistic parameters to adjust the economy and calculate inflation.

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  • Joseph
    07/15/2017
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    Joseph, When the wicked rule the people morn, but we should not be discouraged, there is a God, we need to pray for these lost souls, this too will pass.

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  • Jimmy
    07/17/2017
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    The fed rate was not raised once during 8 years under obama but already raised at least once and I believe I read twice under Trump. AUDIT THE FED!

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  • D
    07/28/2017
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    Early Americans took the first two central banks of the US to the ground. The same needs to happen to the Fed, which is the third central bank of the US.

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  • Care4all
    07/14/2017
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    Raising taxes is counterproductive to any report that we are doing well in our economy. Who's economy are we considering? The young family that lives from pay check to pay check or an over indulging power that is supporting the rich?

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  • Amy
    07/13/2017
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    Nope

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  • John
    07/13/2017
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    As the interest rate increases so too will the interest required to be paid on our 20 TRILLION debt of which 10 TRILLION was amassed under OBAMA. I just hope millennials realize that Obama put each of them in debt to the tune of $30,000 each. In total each American owes $60,000 as our part of the debt! As we continue to post deficits each year and interest rates that $60,000 will continue to rise. Future US budgets will be consumed by interest payments due on the outstanding debts of our nation. So millennials is it time to actively pursue reducing our debts so that your and your peers don't get stuck with bill?

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  • Shauna
    07/13/2017
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    Dual mandate needed. Jobs and economic security go hand in hand.

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  • Loraki
    07/13/2017
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    #AuditTheFed It's long overdue!

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  • Marc
    07/13/2017
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    The federal reserve bank is operating currently with 2 audits done periodically on their performance of their duties. Adding a third audit is simply redundant and likely only serving political reasons. We need to keep politics out of the making and implementing of our monetary policy, otherwise we will turn into China and others that manipulate their currency and monetary policy

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