Tags: janet yellen | federal reserve | economy | expansion

Yellen Said to Voice Confidence in US Expansion Amid Risks

Wednesday, 15 October 2014 04:22 PM

Federal Reserve Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth and turbulent financial markets at a closed-door meeting in Washington last weekend, according to two people familiar with her comments.

The people, who asked not to be named because the meeting was private, said Yellen told the Group of 30 that the economy looked to be on track to achieve growth of around 3 percent going forward. She also saw inflation eventually rising back up to the Fed’s 2 percent target as unemployment falls further, according to the people.

Michelle Smith, a Fed spokeswoman, declined to comment on the meeting, which took place on the fringes of the annual gathering of the International Monetary Fund and World Bank.

The G-30 describes itself as a “nonprofit, international body composed of very senior representatives of the private and public sectors and academia.” Former European Central Bank President Jean-Claude Trichet is chairman, and former Fed Chairman Paul Volcker is chairman emeritus. G-30 Executive Director Stuart Mackintosh was unavailable for immediate comment.

Yellen’s comments helped lift stocks and Treasury yields. The Standard & Poor’s 500 Index was down 0.6 percent at 3:39 p.m. in New York after falling as much as 3 percent. The yield on the two-year Treasury note was down 5 basis points, or 0.05 percentage point, to 0.32 percent after dropping as much as 13 basis points.

Fed Forecasts

Yellen’s reported remarks were roughly in line with the forecasts presented by Fed policy makers at their last meeting in September. They saw the economy growing by 2.6 to 3 percent next year and inflation rising to 1.7 to 2 percent in 2016, according to their central tendency forecasts, which excludes the three highest and three lowest projections.

The economy has expanded at a 2.2 percent annual rate since the recession ended in June 2009. Inflation, as measured by the personal consumption expenditures price index, was 1.5 percent in August.

In a press conference on Sept. 17 following the meeting of the Federal Open Market Committee, Yellen said policy makers expected “a moderate pace of growth going forward.”

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Federal Reserve Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth and turbulent financial markets at a closed-door meeting in Washington last weekend, according to two people familiar with her...
janet yellen, federal reserve, economy, expansion
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2014-22-15
Wednesday, 15 October 2014 04:22 PM
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