WASHINGTON (AP) – Chair Janet Yellen said Thursday that she expects the Federal Reserve to begin raising interest rates from record lows by the end of the year.
In a lecture at the University of Massachusetts at Amherst, Yellen said she thought inflation would gradually move up to the Fed’s target rate of 2 percent as unusually low oil prices and other factors prove temporary. And she suggested that global economic weakness won’t likely be significant enough to dissuade the Fed from raising its key short-term rate from zero by December.
Yellen’s comments may help clarify doubts about the Fed’s intentions that deepened last week after its latest policy meeting ended. The Fed chose not to raise rates, citing global economic pressures and concern about excessively low inflation.
That decision raised worries that the Fed had greater concerns about economic problems in China and falling stock markets than investors had previously thought.
In her speech Thursday, Yellen said Fed officials continue to monitor economic troubles abroad. But she said officials don’t think those challenges will significantly influence the central bank’s interest-rate decisions.