Yellen to Congress: Fed to Continue With Interest Rate Hikes
Join us and tell your reps how you feel!
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)
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