Federal Reserve Chair Janet Yellen will probably be quizzed about how President-elect Donald Trump’s fiscal policies might affect the economic outlook and path for rate increases when she gives congressional testimony Thursday. Don’t expect a clear answer.
Almost every Fed official who spoke publicly so far this week -- a list that includes nine of the 17 regional bank presidents and Fed governors -- has been asked how tax cuts or fiscal stimulus under Trump could affect the outlook. All have said they’re unsure because it’s not yet obvious which policies will be pursued and enacted. Several have indicated that expansionary fiscal policy could give the Fed more scope to increase rates.