MAY 10, 2021 – FORMER FED CHAIR THINKS RATES NEED TO RISE
Janet Yellen, current Treasury Secretary and former Chair of the Federal Reserve, said last week interest rates may have to rise to keep the economy from overheating after the influx of trillions of dollars of stimulus spending.
Later that day, in a slight reversal, she modified her call for higher rates by saying she respects the Federal Reserve’s independence and was not trying to influence their decision. Fed Chair Jerome Powell has repeatedly said rates will not go up until inflation steadies at 2 percent and the job market is achieves full employment. The Fed has stated inflation during 2021 is seen as transitory, due to all the spending and rapid growth, and they expect price pressures to abate into 2022.
The US economy has been on a roll as the country began reopening, post-pandemic. First quarter 2021 GDP was up 6.4 percent, with Goldman Sachs predicting second quarter growth to exceed 10 percent.