Federal Reserve Chair Janet Yellen said on Thursday that the central bank is “not at all” considering raising interest rates anytime soon.
The comments by Yellen, who is also chair of the Federal Open Market Committee, came amid speculation about the possibility of an interest rate hike in the US next month.
Yellen’s comments come as her predecessor Ben Bernanke, who took office in 2009, has repeatedly said the Fed should not raise interest rates in a year.
However, Bernanke has also said the central banks interest rate decisions are a matter of long-term fiscal policy and not a matter for immediate monetary easing.
In a speech at the Economic Club of New York, Bernkels predecessor, Ben Bernks, said the next interest rate decision should be made “when the economy is healthier and more durable”.
“I would expect the rate of interest to be lower than the current level,” Bernanke said.
“I don’t expect it to be significantly higher.
It would be a prudent thing to do.”
The US Federal Open Markets Fund, which regulates the rate at which US banks lend to each other, has been forecasting that the Federal Reserve will likely raise interest rate at its June 15-17 meeting.
Yellin said on Friday that a rate increase is unlikely.
“It would be premature to make any policy announcements at this point,” she said.
The Federal Reserve is likely to cut rates in June and could also increase them in September or December, said David Tepper, chief economist at Bank of America Merrill Lynch.
The Fed’s policy committee meets this week in Washington to consider the Federal Funds rate, which measures the spread between the Fed’s target rate and its policy rate.
The Fed has already indicated it is poised to raise rates.
While there is no sign of any imminent rate hike by the Federal Interest Rate Board, the Federal Bankers Association has been warning for months that the Fed could be poised to start a gradual rise in the Fed Funds rate in 2018.
While Yellen was speaking at the American Economic Association annual meeting in Washington, the US economy slowed to a crawl in the third quarter, the strongest quarterly contraction in years, according to the latest US Bureau of Labor Statistics data.
In the latest quarter, US employment contracted by 2.2 million, while the unemployment rate ticked up to 7.2%.