Inflation is ‘biggest surprise' in the economy, says Yellen

(Oct 15): Federal Reserve Chair Janet Yellen said that the US central bank expects to continue to raise interest rates gradually as solid growth, a strong labor market and a healthy global economy lift prices even as she recognised that inflation has been surprisingly low.

“My best guess is that these soft readings will not persist, and with the ongoing strengthening of labour markets, I expect inflation to move higher next year,” Yellen said Sunday at the Group of Thirty’s Annual International Banking Seminar in Washington.

Yellen’s term expires in February and she is said to be among the candidates President Donald Trump is considering to be his pick to lead the central bank. She has presided over a sustained recovery from the global financial crisis, though inflation has remained below the Fed’s 2% goal, a development that’s puzzled policy makers at a time when the unemployment rate has fallen past its pre-crisis low.

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