In a recent speech at Jackson Hole, Federal Reserve Chairwoman Janet Yellen supported the anticipation of two possible rate hikes this year, noting that the case for a rate hike has strengthened.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,” Yellen said.
Job gains have averaged 190,000 over the past three months, and in addition to the rising labor market, experts believe that the “strengthening” Yellen points to could be based on the bolstered dollar and the recovery of economic confidence post-Brexit, which stalled rate predictions back in June.
Yellen commented heavily on the need to refresh the Fed’s toolkit in order to hold off the next recession. Friday’s release of the August jobs report will likely offer insight into when the next rate hike may occur.