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Yellen Brushes Aside Inflation ‘Mystery’ While Fed Eyes Rate Hike

  • Dollar, bond yields rise as Fed sticks with gradual tightening
  • Says ‘ongoing strength of the economy’ to warrant more hikes
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Yellen Says Inflation Shortfall Is a 'Mystery'

Federal Reserve Chair Janet Yellen acknowledged that the fall in inflation this year was a bit of a “mystery” but suggested that the central bank was on course to raise interest rates again in 2017 nonetheless.

She told reporters on Wednesday that the economy was robust enough to withstand further rate increases and an imminent reduction in the Fed’s $4.5 trillion balance sheet, as it exits from a crisis-era policy a decade after the onset of the Great Recession.