Fed may raise rates as soon as next spring, Yellen suggests
Published on Mar 20, 2014 5:12 AM
WASHINGTON (REUTERS) - The Federal Reserve will probably end its massive bond-buying program this coming fall, and could start to raise interest rates around six months later, Fed Chair Janet Yellen said on Wednesday.
That's a somewhat more aggressive path toward higher rates than some investors had anticipated, and both US stocks and bonds slumped. Futures traders now are pricing in a first rate hike as soon as April 2015.
"She certainly moved (the timetable) up a little bit and I don't think the market was expecting that at all because she is widely viewed as being more on the dovish side of the aisle than she is on the hawkish side," said Peter Kenny, CEO of Clearpool Group in New York.
In announcing its view on future rates after a two-day policy meeting, the Fed dropped a set of guideposts it was using to help the public anticipate when it would finally start bumping overnight borrowing costs up from zero.
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