Federal Reserve Chair Janet Yellen. Photo / AP
Federal Reserve chairwoman Janet Yellen has opened the door a little wider to a rate hike, after voicing optimism about the US economy at her eagerly awaited speech at the Jackson Hole summit of central bankers, says an analyst.
Markets have been watching closely for signs the Fed is ready
to start raising US interest rates, a move that would lift the US dollar and push down the kiwi. Yellen said the US economy was nearing the Fed's goals of full employment and stable prices.
"Based on this economic outlook, the FOMC [Federal Open Market Committee] continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives."
Craigs Investment Partners head of private wealth research Mark Lister said a rise in US interest rates would cause some volatility.
"That's fine with me, because I think we should all be very happy if the world begins to slowly wean itself off the low-interest rate life support, and move back toward normality," Lister said.