Indebted consumers nervous about Wednesday's interest rate hike from the Fed can take solace even as their credit card bills shoot higher, Fed Chair Janet Yellen said.
"The simple message is the economy is doing well," the central bank leader said in her quarterly news conference following the Federal Open Market Committee meeting. The statement was in response to a question about what consumers should take from the decision to raise the central bank's benchmark rate.
"We have confidence in the robustness of the economy and its resilience to shocks," she added. "It's performed well over the past several years. We've created since the trough in employment after the financial crisis around 16 million jobs."
The increase was the second in the past three months for a Fed that is looking to get monetary policy back to normal after a historically accommodative period following the financial crisis.
While the stock market has zoomed higher and the unemployment rate has fallen from 10 percent to 4.7 percent, inflation remains low, real wages have been flat and first-quarter economic growth is on pace to rise just 0.9 percent, according to the latest Atlanta Fed projections.
However, Yellen insisted the economy has reached the point where the Fed can start tightening in a deliberate manner.
"The unemployment rate has moved way down and many more people feel optimistic about their prospects in the labor market," she said. "There's job security. We're seeing more people who are feeling free to quit their jobs, getting outside offers for other opportunities. So I think the job market, which is an important focus for us, is certainly improving."
She conceded that those with less skills and education are still hurting, but others "are enjoying a stronger labor market and feel very much better about that.
"We're operating in an environment where the U.S. economy is performing well and risks seem pretty balanced," Yellen added. "I think people can feel pretty good about the economic outlook."
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