Set to Lift Interest Rate, Fed Embraces Investors’ Optimism -<br />By BINYAMIN APPELBAUMMARCH 3, 2017<br />Janet L. Yellen, the chairwoman of the Federal Reserve, said<br />that the Fed plans to raise its benchmark interest rates this month if conditions are favorable.<br />Ms. Yellen added that the Fed still expected to raise rates twice more later in the year, which she said would bring the benchmark rate close to a level<br />that the Fed regards as neutral, with low rates no longer providing an inducement for borrowing and risk-taking.<br />Federal funds target rate<br />The broader consequences depend on the Fed’s ability to raise interest rates without slowing economic growth.<br />William C. Dudley, the president of the Federal Reserve Bank of New York, who described markets as “very buoyant” on Tuesday, has said in the past<br />that if markets did not respond to rate increases, the Fed might need to act more forcefully to tighten financial conditions.<br />“There is almost no economic indicator that has come in badly in the last three months.”<br />Asked whether Fed officials were delivering a coordinated message, Mr. Fischer<br />responded wryly, “If there has been a conscious effort, I’m about to join it.”<br />The impending rate increase could heighten tensions with the White House, which wants to stimulate<br />growth by cutting taxes, reducing regulation and increasing defense and infrastructure spending.
