Connect with us

Hi, what are you looking for?

Stocks

Janet Yellen Clarifies Interest Rate Comments

The Treasury Secretary issued a clarification after a comment sent stocks reeling.

Earlier in the week, Treasury Secretary Janet Yellen spoke about the current state of the US economy at an event hosted by The Atlantic. When the topic of the Federal Reserve and interest rates came up, she expressed concerns about an increase in interest rates.

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,” Yellen said.

While a seemingly innocuous comment, Yellen’s authority in the economy means that many investors tend to take her words at face value. Her expressed concerns prompted a massive selloff on Tuesday, especially in stocks that could potentially be vulnerable to an interest rate hike such as tech. After this occurred, Yellen made a follow-up statement at The Wall Street Journal’s CEO Council Summit to clarify what she meant.

“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address [it],” Yellen said.

The market has since evened out, leaving analysts to speculate on the weight of Yellen’s comments and the likely future the Federal Reserve will face once the economy returns to normal from the pandemic.

“Markets were unhappy at this statement of the blindingly obvious,” said Paul Donovan, chief economist of UBS Global Wealth Management. “Rates will clearly rise in the future.”

“The question is not whether there will be some inflation this year, but whether it will represent ‘overheating’ of the economy as a whole,” J. Bradford DeLong, a professor of economics at the University of California at Berkeley, wrote in a column.

You May Also Like

News

In the past year, Peloton, manufacturers of stationary exercise bicycles and treadmills, has been experiencing some severe financial difficulties. The company went through a...

News

While the ongoing supply chain problems affecting the global economy have had the expected effects, they’ve also had some decidedly unexpected effects. Specifically, many...

News

As gas prices continue to rise and consumer confidence drops, not to mention the ongoing war in Ukraine, the European economy is taking a...

News

As the environmental need for electric vehicles becomes more pressing, and the car-buying public becomes more eager for them, automotive manufacturers are getting ready...

News

This morning, Coinbase CEO Brian Armstrong sent a mass email out to his company informing everyone that, as stock and crypto prices slip and...

News

Last week, a former cybersecurity expert for Twitter, Peiter “Mudge” Zatko, released a whistleblower report on the social platform. In his report, Zatko cited...

News

Zelle is a peer-to-peer payment app and service that can be used by individuals to send and receive money, in a similar vein to...

News

Earlier this week, following the third-term victory of Chinese President Xi Jinping, market shares in Hong Kong experienced a sudden, violent sell-off. Xi’s controversial...