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11/18/2016

Fed Chairwoman Yellen's Testimony Before the US Congress Economy Committee

"I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the Committee's 2 percent objective. the case for an increase in the target range had continued to strengthen and that such an increase could well become appropriate relatively soon"...

Federal Reserve (FED) (USA Central Bank) Chairwoman Jannet Yellen presented testimony before the US Congress Economy Committee on November 17, 2016.

The future monetary policies of Fed which willd efinitely have effects on global economy, is monitored very closely and below we present you the important parts of the Chairwoman Yellen's testimony.

"U.S. economy has made further progress this year toward the objectives of maximum employment and price stability"

"The U.S. economy has made further progress this year toward the Federal Reserve's dual-mandate objectives of maximum employment and price stability. The unemployment rate, which stood at 4.9 percent in October, has held relatively steady since the beginning of the year. This favorable outcome has been reflected in the labor force participation rate, which has been about unchanged this year, on net, despite an underlying downward trend stemming from the aging of the U.S. population.

Meanwhile, U.S. economic growth appears to have picked up from its subdued pace earlier this year. After rising at an annual rate of just 1 percent in the first half of this year, inflation-adjusted gross domestic product is estimated to have increased nearly 3 percent in the third quarter. Turning to inflation, overall consumer prices, as measured by the price index for personal consumption expenditures, increased 1-1/4 percent over the 12 months ending in September, a somewhat higher pace than earlier this year but still below the FOMC's 2 percent objective. Much of this shortfall continues to reflect earlier declines in energy prices and in prices of non-energy imports. 

"Economic growth is expected to continue at a moderate pace, rate increase can be appropriate relatively soon"

I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the Committee's 2 percent objective over the next couple of years. 

At our meeting earlier this month, the Committee judged that the case for an increase in the target range had continued to strengthen and that such an increase could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the Committee's objectives. Furthermore, the Committee judged that near-term risks to the outlook were roughly balanced."