WASHINGTON, July 16 Following are highlights
from the question and answer session of Federal Reserve Chair
Janet Yellen's testimony before the House Financial Services
Committee on Wednesday.
Yellen's prepared remarks to the committee were identical to
those she delivered in testimony to the Senate Banking Committee
YELLEN ON PUTTING LIMITS ON USE OF REVERSE REPOS
"We have discussed and are aware of the potential if it's
available on a very large scale, and can be expanded and
contracted very quickly, to create financial stability risks and
we absolutely intend to make sure that we address those risks."
YELLEN ON OPTIMISM ABOUT ECONOMY AND GROWTH IN LABOR MARKET
"I am optimistic about the economy and that's reflected in
the forecasts that are included in the monetary policy report.
We had a very surprising negative growth in the first quarter,
which is a number that in a way doesn't seem consistent with the
underlining momentum in the economy and many indicators of
spending and production. And I do think the economy is
recovering and that growth is picking up and that we have
sufficient growth to support continued improvement in the labor
YELLEN ON STABILITY THREATS FROM EQUITIES, DEBT
"Threats to financial stability are at a moderate level and
not a very high level."
"Some things may be on the high side and there may be some
pockets where we see valuations becoming very stretched but not
generally. The use of leverage is not broad-based, it hasn't
increased, and credit growth is not at alarming levels by any