US dollars (2)

The US looks nearer to seeing interest rates rise for the first time since the financial crisis after Federal Reserve Janet Yellen told Congress that the economy is coming closer to a point where it can handle an increase. 

Following a series of positive economic data, Ms Yellen said an interest rates rise would show “how far our economy has come in recovering from the effects of the financial crisis”.

Analysts widely expect the Federal Reserve to raise interest rates at its next meeting on 15 and 16 December.

Ms Yellen accepted that slowing growth in the global economy and a strong US dollar would have an impact on the country, but stressed that consumer and business spending, and household investment was still strong enough to maintain growth.

A key factor in the decision could be the latest jobs figures, which are published today (Friday).

“Ongoing gains in the labour market, coupled with my judgement that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2%,” Ms Yellen said.

The Fed chair believes that growth of more than 100,000 jobs would be enough the sustain the employment market.

“I would expect to see some upward pressure on wages – I think we’ve seen some welcome hints,” she said.

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