Yellen: Fed more to blame for wider trade deficit

Widening deficit: Shipping containers stand attached to trucks at the Port of Los Angeles in San Pedro, California. The US trade deficit with China widened to a record US33.6bil on average in the 12 months through September. — AFP

BEIJING: Federal Reserve interest-rate hikes in response to fiscal stimulus are causing the US trade deficit to widen, not unfair Chinese trade practices, former Fed chair Janet Yellen said.

Higher interest rates in the US relative to those elsewhere put upward pressure on the US dollar exchange rate, and “this is part of why we may get a larger trade deficit,” Yellen said at a conference in Beijing.