Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the Federal Reserve chief Janet Yellen presented an upbeat outlook, free from crisis. She said the Fed has learned lessons from the financial crisis and has brought stability to the banking system. Banks last week passed the first round of the Fed's stress tests to see how they would perform under adverse conditions like a 10 percent unemployment rate and turbulence in commercial real estate and corporate debt. Pointing to the fact that all banks passed the quantitative aspects, she said that public can see how strong the banks are in terms of capital they hold.

She also made a bold prediction that a crisis like the one we have seen in 2008/09 will not be repeated in ‘our’ lifetime and added that the fallout could have far worse without the intervention by the US Federal Reserve. She added, “I think the system is much safer and much sounder……..We are doing a lot more to try to look for financial stability risks that may not be immediately apparent but to look in corners of the financial system that are not subject to regulation, outside those areas in order to try to detect threats to financial stability that may be emerging."

Earlier this month, the Fed hikes interest rates by 25 basis points for the second time in 2017 and for a fourth time since the financial crisis and have also unveiled plans to unwind its balance sheet, which is expected to begin later this year.