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Federal Reserve Chair Janet Yellen said Friday that the case for raising interest rates has strengthened in light of a solid job market and an improved outlook for the US economy and inflation.

At a gathering of central bankers from round the world in Jackson Hole, Wyoming, Yellen said improvements in the USA labor market and expectations for moderate economic growth have boosted the case for a rate rise, supporting what the rate futures market has been pricing in for some time. The gains were all but erased after Fed Vice Chairman Stanley Fischer said her remarks leave open the possibility of boosting rates in September.

The economy is "nearing" the Fed's goals of full employment and stable prices, share said.

With an interest rate hike unlikely in the immediate future, the dollar is struggling to gain traction.

Still Yellen declined to hint at whether the Fed might raise rates at its next policy meeting, September 20-21, or at its subsequent meetings in early November and mid-December.

The head of America's central bank said the case for an interest rate hike had strengthened but stopped short of indicating any timetable for a move.

"Yellen's speech at Jackson Hole today didn't necessarily offer much in the way of surprises", said OANDA senior market analyst Craig Erlam.

"New policy tools, which helped the Federal Reserve respond to the financial crisis and Great Recession, are likely to remain useful in dealing with future downturns", Yellen said. Although setting a hawkish tone and perhaps trying to sound balanced, Yellen did issue a few cautionary words, but for the most part, she indicated that more rate hikes were on the horizon.

Although US government data earlier on Friday showed the economy growing only sluggishly in the second quarter, Yellen said a lot of new jobs were being created and economic growth would likely continue at a moderate pace.

Yellen's words returned a measure of clarity on the intentions of U.S. monetary policymakers, who have been publicly at odds in recent months over the need to raise rates in the near-term. "On balance, it strengthened the case for a December move", said Bill Northey, chief investment officer for the private client group at U.S. Bank in Helena, Montana.

Prices for fed funds futures implied investors saw about even odds that the Fed will raise rates in December, largely unchanged from before Yellen's remarks.

The dollar eased to 100.47 yen from 100.55 yen Thursday in NY, while the euro nudged up to US$1.1291 from US$1.1281.

In a meeting, members of the groups Fed Up and the Center for Popular Democracy told Fed policymakers that the assessment that the USA was approaching full employment did not reflect life for many blacks and Latinos looking for work. The dollar's 5 percent loss this year reflects a dimming outlook for the US central bank to reduce stimulus and diverge from unprecedented easing in Europe and Asia.

In afternoon trading, the dollar index, which measures the greenback versus six major currencies, rose 0.8 percent at 95.563.

By Adam Cater

Source

"Yellen's background as a trained economist and experienced Fed official gave her needed independence from the influence of Wall Street,” says Jordan Haedtler, campaign manager for Fed Up, a grass roots Democratic effort. He says it's concerning that Powell would be Trump's second Carlyle Group veteran appointed to the Fed board. Earlier this year, Trump nominated Randal Quarles, another Carlyle Group alum, to an open Fed board seat overseeing bank regulation.

Read the full article here.

WASHINGTON – The latest crusade in the name of diversity commenced on Thursday, this time aimed squarely at the makeup of the Federal Reserve’s leadership and spearheaded in part by Elizabeth Warren, the senior U.S. senator from Massachusetts.

The Cambridge Democrat recently linked up with fellow Democrat, Michigan U.S. Rep. John Conyers, to send a letter to Janet Yellen, chair of the Federal Reserve Board of Governors, asking the former Clinton administration adviser to take action. They cited a 1977 law that requires the bank regulator to reflect the nation’s diversity.

The progressive duo began their missive by praising her work under President Barack Obama before stating that they “remain deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation.” Instead, they said, the central bank’s leadership “remains overwhelmingly and disproportionately white and male,” and is drawn mainly from major banks and corporations.

The letter cites a statistic reported in February by the left-leaning Center for Popular Democracy that indicates that “83 percent of Federal Reserve head office board members are white” while “men occupy nearly three-fourths of all regional bank directorships.”

The lawmakers assert that the discussions among Fed leaders regarding labor market conditions never once mentioned the situation confronting blacks in 2010, the most recent year for which full transcripts are available. The lawmakers point out that the unemployment rate for blacks that year never fell below 15.5 percent, while the nation’s average jobless rate hovered just below 10 percent during most of that post-recession period.

Fellow Massachusetts U.S. Sen. Ed Markey put his signature on the letter, alongside those of more than 120 other Democrats in Congress

Warren and Conyers later took to social media to rally the public around the cause:

Former Secretary of State Hillary Clinton, the frontrunner for the Democratic presidential nomination, was also quick to throw her support behind the call for diversity:

“The Fed needs to be more representative of America as a whole,” Jesse Ferguson, a Clinton campaign spokesman, told the Associated Press Thursday, adding that Clinton also opposes the fact that three private-sector bankers currently sit on each regional Fed bank board.

The Fed is actively working to further diversify its ranks, bank spokesman Dave Skidmore said in a statement provided to AP.

“Minority representation on Reserve Bank and Branch boards has increased from 16 percent in 2010 to 24 percent in 2016,” Skidmore told AP. “The proportion of women directors has risen from 23 percent to 30 percent over the same period. Currently, 46 percent of all directors are diverse in terms of race and/or gender (with a director who is both female and a minority counted only one time).”

“We are striving to continue that progress.”

By BY EVAN LIPS

Source

“Organizer Ady Barkan of the Center for Popular Democracy, honored at the summit for his work fighting for health care, acidly noted, “We have a lot of house cleaning to do.””

Read the full article here.