Yellen expects Fed to raise rates by year’s end

September 28 00:20 2015

Federal Reserve Chair Janet Yellen told economists gathered Thursday that the conditions she sees now would allow the U.S. central bank to boost short-term interest rates this year.Janet Yellen

Investors have been nervously awaiting the Federal Reserve’s move to start hiking rates for the first time in years. The move toward higher rates would lift U.S. short-term interest rates above their current levels at near zero. Yellen’s remarks where made at a lecture at the University of Massachusetts’ Department of Economics.

Financial markets have been struggling to deal with the pressures that appear at odds with each other. Higher interest rates, historically, have created a headwind for stocks and caused returns to take a hit. However, the apparently reluctance of the Fed to boost rates is stoking worries the economic slowdown in Asia is more of a macro concern than long believed.

Yellen underscored, however, the Fed’s decision to move on interest rates slowly. The Fed vows to be flexible based on what the economy is doing. Currently, the Fed expects inflation to inch up to the Fed’s target rate of 2%.