Treasury Secretary Yellen says rates may have to rise somewhat to keep economy from overheating
Source: CNBC
Treasury Secretary Janet Yellen conceded Tuesday that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending.
It may be that interest rates will have to rise somewhat to make sure that our economy doesnt overheat, Yellen said during an economic forum presented by The Atlantic. Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates.
But these are investments our economy needs to be competitive and to be productive. I think our economy will grow faster because of them, she added.
Later in the day, she tempered her comments somewhat on the need for higher rates, saying she respects the Federal Reserves independence and was not trying to influence decision-making there. Yellen chaired the Fed from 2014-18. The Fed sets interest rates through its Federal Open Market Committee.
Read more: https://www.cnbc.com/2021/05/04/treasury-secretary-yellen-says-rates-may-have-to-rise-somewhat-to-keep-economy-from-overheating.html
NoMoreRepugs
(9,417 posts)8 to a low of 3%. Since 2010 less than .1 (one tenth of one %) and a high of 2.5% or so according to the info provided by the Board of Governors of the Federal Reserve.
So Im to understand possibly raising rates from the current .07% as of Aprils numbers - 7 one-hundredths of one % is a cause for alarm???
If corporate America needs practically free money to be profitable we are all doomed.
Just an opinion...
Yavin4
(35,438 posts)careers.
Yellen and Powell on the record that rates COULD rise if required, but keep in mind both of them and the rest of the Fed have been trying to get inflation above 2.2% for YEARS, and are also on the record they would allow it to 'overshoot' for a period of time, if necessary. Lotta room.
paleotn
(17,912 posts)Fixed income return has been nonexistent since the great recession.
Deminpenn
(15,285 posts)nt
PSPS
(13,593 posts)As you may recall, there was even talk at one time about negative interest rates. Our current low interest rates are an indicator of a sick economy.
twodogsbarking
(9,739 posts)But keep speaking it. I believe you are correct but as long as rates are near zero people keep plowing dollars in the stock market. Sounds planned.
Buckeyeblue
(5,499 posts)I think low long term rates, therefore, low mortgage rates have lead to the spike in housing prices that we are seeing. It's crazy what some homes in my area are selling for. That's what worries me about our economy. Seems like we are lining up for 2008 redux.
Otherwise, gas is creeping back up. But I think that's more of a sign that demand his higher. Good for the economy, not so good for the environment.