Treasury Secretary Janet Yellen is the second Government official in five days to mention that the U.S. economy may require interest rates to move higher so that the economy does not overheat (it overheated months ago in our view when one considers asset prices across most every asset category). Dallas Fed President Robert Kaplan stated on Friday that The Fed ought to be discussing a rate hike now. We would expect the Fed to taper its asset purchase level prior to an actual formal increase in interest rates. Below is a clip from Yellen’s talk earlier today followed by her full interview.
Yellen’s comments about interest rates potentially going higher