Fed rate hike may be warranted later this year: Yellen

27-Mar (Reuters) – The U.S. Federal Reserve is giving “serious consideration” to beginning to reduce its accommodative monetary policy and a rate hike may be warranted later this year, although a downturn in core inflation or wage growth could force it to hold off, the central bank’s chief said on Friday.

Fed Chair Janet Yellen said that after the first rate increase a further, gradual tightening in monetary policy will likely be warranted. If incoming data fails to support the Fed’s forecast, the path of policy will be adjusted, she said.

“With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year,” Yellen said in prepared remarks at a monetary policy conference at the Federal Reserve Bank of San Francisco.

Yellen added that the timing and the path of a Fed hike would depend on the incoming economic data.

[source]

PG View: Perhaps a modestly more hawkish tenor, to keep investors on their heels in the wake of the more dovish than expected tone at the FOMC meeting. The qualifiers remain though and any move is still data dependent.

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