*Yellen says Fed can offer more support for U.S. economy
*Says need policies to promote recovery in housing market
*Housing, consumers unlikely to help economy much near-term
By Ann Saphir
SAN FRANCISCO, Nov 29 Janet Yellen, the Federal
Reserve's influential vice chair, said on Tuesday the U.S.
central bank has room to ease monetary policy further to
support a tenuous economic recovery.
Yellen said turmoil in financial markets stemming from both
Europe's banking crisis and general uncertainty about the
outlook had increased the risks to the global economy, and that
the Fed could offer additional support to U.S. growth.
"The scope remains to provide additional accommodation
through enhanced guidance on the path of the federal funds rate
or through additional purchases of long-term financial assets,"
Yellen said in remarks prepared for delivery to a conference
sponsored by the San Francisco Federal Reserve Bank.
Yellen also called for policies to spur a faster recovery
in the battered U.S. housing market, although she did not
provide any specific recommendations.
The Fed in September decided to dip its toes back into the
housing market by reinvesting proceeds of maturing mortgage and
housing agency debt from its portfolio back into the
mortgage-backed securities market.
Yellen said the contribution to the U.S. recovery from
housing, which is usually key to economic rebounds, is likely
to remain tepid in the near term, and that consumer spending is
also not likely to be a key source of growth due to high
household debt levels.
"The recovery in the United States and other advanced
economies has been proceeding too slowly to provide jobs for
millions of unemployed people," Yellen said.
The U.S. economy grew just 2 percent in the third quarter,
and the jobless rate has hovered near 9 percent all year.
The Federal Reserve, for its part, has aggressively
loosened monetary policy, bringing official interest rates to
effectively zero and purchasing some $2.3 trillion in
securities in an effort to keep long-term rates low.
Some Fed officials have recently expressed a predilection
for resorting to purchases of mortgage-backed securities if
policymakers do decide that further easing is needed.