Yellen, consensus-builder, needs to send strong signal at Fed meet

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Janet Yellen, vice chairman of the U.S. Federal Reserve, speaks during a panel session at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group in Tokyo, Japan, on Wednesday, Oct. 10, 2012. Yellen said Fed asset purchases that boost U.S. economic growth would benefit the world, with emerging nations having the tools to manage capital flows. Photographer: Kiyoshi Ota/Bloomberg via Getty Images

Janet Yellen, vice chairman of the U.S. Federal Reserve, speaks during a panel session at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group in Tokyo, Japan, on Wednesday, Oct. 10, 2012. Yellen said Fed asset purchases that boost U.S. economic growth would benefit the world, with emerging nations having the tools to manage capital flows. Photographer: Kiyoshi Ota/Bloomberg via Getty Images

Federal Reserve Chair Janet Yellen, praised as an adept listener and consensus builder, may need to adopt a stronger tone at this week’s policy meeting if she expects to keep a December interest rate rise in play.

Yellen’s inclusive style has been tested recently by two fellow governors who publicly appeared to disagree with her view, shared by Vice Chair Stanley Fischer, that the Fed will probably need to raise interest rates this year.

Governors are permanent members of the Fed’s policy-making panel who typically vote with the chair, and it is unusual for them to publicly contradict the Fed chief. Yet both Lael Brainard and Daniel Tarullo, speaking shortly after Yellen and Fischer, listed an array of risks to economic growth that suggested rate hikes should wait.

Most other Fed voters, with the notable exception of the dovish president of the Chicago Fed, have suggested that they, like Yellen, support a 2015 rate rise. The arithmetic suggests Yellen could face as many as three dissents from her 10-member panel if she decides to raise rates at the Fed’s December meeting.

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