US interest rates may need to be raised to stave off economic overheating as more of US President Joe Biden’s economic investment programs come into play, Treasury Secretary Janet Yellen said in a speech released on Tuesday.
“It may be that interest rates will need to rise slightly to ensure our economy does not overheat, even if the additional costs are relatively small compared to the size of the economy,” she said in a taped commentary on the virtual event. on the Atlantic coast.
“It could trigger a very modest increase in interest rates to get this kind of reallocation, but this is the investment that our economy needs to be competitive and productive (and) I think our economy will grow faster because of them.”
Overall, Yellen said, programs that include increased spending on infrastructure, childcare and education will “have a significant impact” on inequality.