The Federal Reserve is on course to raise US interest rates this year in a decision that would signal the extent of the country’s recovery from the “trauma” of the financial crisis, Janet Yellen told Congress yesterday.
The Fed chair said that the prospects for the US economy were “favourable” as hiring propels the country towards maximum employment, arguing that factors that have held back inflation were likely to subside.
In a sometimes fractious session before the House Financial Services Committee in Washington, Ms Yellen acknowledged risks to the US from the Greek debt crisis and China’s attempts to tackle its high debt, weak property markets and “volatile” financial conditions. China yesterday reported growth of 7 per cent in the second quarter, unchanged from the previous quarter as stimulus measures cushioned a long-term slowdown.