FOMC decision on Wednesday
With the FOMC all but certain to cut rates by 25 basis points on Wednesday, the former Fed chair Janet Yellen is endorsing the move.
Citing worries of global growth and low inflation, Yellen said:
“I would be inclined to cut a bit. I wouldn’t see this as the beginning – unless things change – of a major easing cycle. But I do think it’s appropriate.”
- She thinks inflation is too low
- Global economy was weakening because of trade conflicts that have created uncertainty for business investment
- US interest rate increases have contributed to slower growth abroad
- The US is not an island. When the US tightens policy it has repercussions in many parts of the world.
- The Fed’s tightenings appeared to be weakening financial markets and the prospects for growth globally
Yellen made the comments at an event kicking off the Aspen Economic Strategy Group meeting in Aspen, Colorado today.