USA | Yellen says an interest rate hike may be needed

(Washington) Treasury Secretary Janet Yellen said on Tuesday that interest rates in the United States should undoubtedly be raised slightly to prevent the economy from overheating in line with the investment plans put forward by Joe Biden.

France Media Agency

“Even if the additional costs (linked to investment plans) are relatively small compared to the size of the economy, it is necessary to raise interest rates somewhat so that our economy does not overheat,” he said.

Joe Biden recently put forward two separate plans: a 10-year, US $ 1.8 trillion family plan, and an eight-year, $ 2 trillion infrastructure investment plan.

“It refers to the redistribution of resources for these types of projects,” Janet Yellen said during a video conference event organized by the media. Atlantic.

“It may take a very moderate increase in interest rates to get this redistribution (resources), but these are investments that our economy needs to be competitive and productive,” he added.

MMe Yellen did not give details on when these hikes could occur.

The US Federal Reserve (Fed), in March 2020, faced a threat to the epidemic economy, cutting interest rates overnight from 0 to 0.25%.

Its chairman, Jerome Powell, reiterated in support of the recent recovery that there was no question of raising them in the future.

The enormous investment plans put forward by Joe Biden should be funded by tax increases for large corporations and wealthy Americans.

Janet Yellen estimates that “the gap between what we collect under our tax laws and what we collect when everyone pays taxes” is more than $ 7 trillion a decade.

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“We are trying to take meaningful steps to close this gap,” he said.

But these investment plans are far from being accepted and will now be the subject of lengthy negotiations with elected representatives in Congress.

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