JACKSON, Wyo.–Federal Reserve Chair Janet Yellen indicated last week that a rate increase could still take place in 2016.
"I believe the case for an increase in the federal funds rate has strengthened in recent months," Yellen said during remarks here.
The next meeting at which the Fed could consider such an increase is not scheduled to take place until September, with another set for November. With the latter, analysts have suggested it’s unlikely the Fed would make a move so close to the presidential elections.
Analysts have also noted that Yellen has made similar pronouncements in the past, including in May when she suggested an increase could take place over the summer.
Yellen spent much of her remarks here focused on the tools used by the Fed to respond to the Great Recession.
"While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market," she said of current conditions.
NAFCU Chief Economist Curt Long said Yellen’s remarks indicate the Fed is moving closer to a rate hike.
“Yellen’s comments were in line with those of other Fed officials who see the economy as drawing nearer to the point that would warrant a rate hike,” said Long. “The past two jobs reports have been especially robust, and they along with the minimal immediate impact from Brexit have seemed to allay concerns among a number of Fed officials. The August employment figures take on added importance, particularly for those officials who may be expected to offer resistance to a move in the third quarter. The odds still favor a rate hike in Q4, but September is quickly nearing a coin-flip proposition.”