"Fed Poised for Three Rate Hikes in 2017 Following Yellen's Capitol Hill Visit"
Georgetown McDonough School of Business Professor Sumit Agarwal discusses Janet Yellen's recent visit to Capitol Hill. "Yellen testified before the Senate Banking Committee Tuesday and the House Financial Services Committee Wednesday in her first semiannual monetary policy report to the new administration". Professor Agarwal boils down her testimony to five key points:
- The need to restore the federal discount rate — the interest rate charged to commercial banks for loans from their regional Federal Reserve Bank — as the active monetary policy tool again without waiting too long.
- The plan to reduce the federal reserve balance sheet in a predictable and orderly manner after confidence that the discount rate is once again effective in affecting monetary policy is restored.
- Commitment to work with any new regulatory supervision chief and the Treasury to reduce regulatory burden and support fiscal policy.
- Fiscal policy should be good for the country and not bust our budget.
- Loss of access to healthcare will have an impact on consumer spending.
Read the entire OpEd here.