US Treasury Secretary Janet Yellen said interest rates could need to rise modestly to prevent overheating due to increased government spending.
“Interest rates may have to rise slightly to ensure that the US economy doesn’t overheat,” Yellen said in an interview with The Atlantic magazine on Thursday. “It could lead to a very modest rise in interest rates,” he added. The interview was published on the website on the 4th.
He emphasized that the huge spending plan proposed by President Biden will ultimately benefit the economy even if interest rates rise. “We believe this is an investment needed to keep the US economy highly competitive and productive, which will accelerate US economic growth,” he said.
The Biden administration is proposing an infrastructure plan and a social security expansion plan totaling more than $ 4 trillion, following the economic measures of $ 1.9 trillion (about 208 trillion yen) that were enacted in March.
“The plan has a demand effect on the economy, but more importantly, it has a large supply effect,” Yellen said.
Original title:Yellen Says Spending May Spur ‘Modest’ Interest-Rate Rises (2)（抜粋）
(Add and update Yellen’s remarks)