Yell's disclosures started to strengthen U.S. dollar

Baku. 16 October. REPORT.AZ/ “The biggest surprise in the U.S. economy this year has been inflation”. Report informs citing the Bloomberg, Fed chief Janet Yellen said Sunday at the Group of Thirty’s Annual International Banking Seminar in Washington.

While the Fed chair said she expects a pickup, she and her colleagues “recognize that this year’s low inflation could reflect something more persistent than is reflected in our baseline projections.”

Inflation came in at 1.3 percent in August after stripping out volatile food and fuel, well below the Fed’s target. It has been headed in the wrong direction for months, and data through the end of the year will be unreliable, clouded by seasonal adjustment issues and price fluctuations wrought by hurricanes that hit the U.S. South late this summer.

Employment, meanwhile, has surpassed officials’ expectations. The U.S. jobless rate has fallen to 4.2 percent, its lowest level since 2001, and the participation rate has shown stabilization as Americans come back into the workforce. Wages have been slow to accelerate, but show early signs of life.

J. Yellen announced that this month Fed’s balance will begin to reduce, but will also increase discount rate. She said 0.1-0.3 percent fluctuation of inflation did not seem to be important in the decision to increase discount rate.

After the disclosures, the dollar's exchange rate has started to grow stronger. At present, the euro / dollar rate has dropped by 0.25% to 1.1790 USD / EUR. The decline is expected to continue.