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Yellen Stresses Fed Independence, Plays Down Inflation Worry

US

To recap, comments from U.S. Treasury Secretary Yellen hit just after 16:00 NY time (21:00 London):

  • She does not foresee an "inflation problem," but noted that if one were to appear then the Fed would address the matter. She also flagged transitory price pressures over the next "6 months or so."
  • Yellen was keen to stress her strong belief in Fed independence and highlighted that she is not predicting/recommending a rate hike from the Fed.
  • She also reiterated the idea that she expects full employment in '22.
  • This came in the wake of her comments made earlier in NY hours re: the potential need for the Fed to hike rates if the economy overheats. We would suggest that those initial comments in isolation didn't provide anything new, having featured in Yellen's commentary in recent months e.g. the Fed has the tools to deal with inflation if it becomes an issue.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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