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Highlights: Fed's Yellen's Prepared Testimony to House Panel

Tuesday, 11 Feb 2014 08:41 AM

The following are highlights of Federal Reserve Chair Janet Yellen's testimony on the U.S. economy and monetary policy as prepared for delivery on Tuesday to the House Financial Services Committee.

YELLEN ON EVALUATING HEALTH OF LABOR MARKET:

"The recovery in the labor market is far from complete. The unemployment rate is still well above levels that Federal Open Market Committee (FOMC) participants estimate is consistent with maximum sustainable employment. Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high. These observations underscore the importance of considering more than the unemployment rate when evaluating the condition of the U.S. labor market."

YELLEN ON RECENT WEAKNESS IN INFLATION:

"Some of the recent softness reflects factors that seem likely to prove transitory, including falling prices for crude oil and declines in non-oil import prices."

YELLEN ON VOLATILITY IN FINANCIAL MARKETS:

"We have been watching closely the recent volatility in global financial markets. Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook. We will, of course, continue to monitor the situation."

YELLEN ON MONETARY POLICY STRATEGY:

"I expect a great deal of continuity in the FOMC's approach to monetary policy. I served on the Committee as we formulated our current policy strategy and I strongly support that strategy."

YELLEN ON THE PACE OF REDUCTIONS IN MONTHLY BOND BUYING:

"If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. That said, purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on its outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases."

YELLEN ON JOBLESS RATE AND INFLATION THRESHOLDS:

"Crossing one of these thresholds will not automatically prompt an increase in the federal funds rate, but will instead indicate only that it had become appropriate for the Committee to consider whether the broader economic outlook would justify such an increase."

YELLEN ON KEEPING INFLATION CLOSE TO TARGET:

"I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level."

 

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The following are highlights of Federal Reserve Chair Janet Yellen's testimony on the U.S. economy and monetary policy as prepared for delivery on Tuesday to the House Financial Services Committee.
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2014-41-11
Tuesday, 11 Feb 2014 08:41 AM
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