WASHINGTON, July 15 Following are selected
highlights from the prepared testimony of Federal Reserve Chair
Janet Yellen before the Senate Banking Committee on Tuesday.
YELLEN ON POLICY OUTLOOK
"In sum, since the February Monetary Policy Report, further
important progress has been made in restoring the economy to
health and in strengthening the financial system. Yet too many
Americans remain unemployed, inflation remains below our
longer-run objective, and not all of the necessary financial
reform initiatives have been completed. The Federal Reserve
remains committed to employing all of its resources and tools to
achieve its macroeconomic objectives and to foster a stronger
and more resilient financial system."
YELLEN ON LABOR MARKET CONDITIONS
"The FOMC is committed to policies that promote maximum
employment and price stability, consistent with our dual mandate
from the Congress. Given the economic situation that I just
described, we judge that a high degree of monetary policy
accommodation remains appropriate.
Labor force participation appears weaker than one would
expect based on the aging of the population and the level of
unemployment. These and other indications that significant slack
remains in labor markets are corroborated by the continued slow
pace of growth in most measures of hourly compensation."
YELLEN ON INFLATION
"Consistent with the anticipated further recovery in the
labor market, and given that longer-term inflation expectations
appear to be well anchored, we expect inflation to move back
toward our 2 percent objective over coming years."
YELLEN ON ECONOMIC GROWTH
"Although the decline in GDP in the first quarter led to
some downgrading of our growth projections for this year, I and
other FOMC participants continue to anticipate that economic
activity will expand at a moderate pace over the next several
years, supported by accommodative monetary policy, a waning drag
from fiscal policy, the lagged effects of higher home prices and
equity values, and strengthening foreign growth."
(Washington ecoomics team)