• Yellen Expects Inflation to Fall in Range of 2% by End of 2024
• Fed officials expected to hold rates steady on Wednesday
Treasury Secretary, Janet Yellen said it would make sense for the Federal Reserve to consider lowering interest rates as inflation eases to keep the economy on an even level.
As the consumer price index rose 3.1% last month from a year earlier, core inflation increased 4% for a second month. Watching this upward trend Janet Yellen, Treasury Secretary commented on Wednesday in an interview on CNBC: “My expectation is that inflation will continue to come down.” She anticipates that inflation will fall into a range near 2% by the end of 2024. “As inflation moves down, in a way, it’s natural that interest rates come down somewhat because real interest rates would otherwise increase, which would tend to tighten financial conditions,” Yellen added.
In the article by Christopher Condon and Viktoria Dendrinou for Bloomberg, they said that “as inflation decreases, policy rates become more restrictive if they remain steady.
Fed officials were beginning the second day of their policy meeting. The Central Bank is widely expected to hold interest rates steady later today for the third consecutive time.
“My expectation is that inflation will continue to come down,” Yellen said, adding that she anticipated inflation will fall into a range near 2% by the end of 2024. “But they [The Central Ban and The Fed] have two risks to manage. One that inflation doesn’t come down back to their target as they envision it, and the other is the economy becomes too weak,” she said. “I’m going to leave that to them.”