(Reuters) - The Federal Reserve will still need to deliver “unusually accommodative” monetary policy even once the U.S. economy returns to “where we want it to be,” Fed Chair Janet Yellen was quoted as saying in a magazine article.
The New Yorker, which interviewed Yellen three times in the last few months, in its July 21 issue quoted her as saying the economy still faced headwinds.
“And so even when the headwinds have diminished to the point where the economy is finally back on track and it’s where we want it to be, it’s still going to require an unusually accommodative monetary policy,” she is quoted as saying in the article that stresses Yellen’s role as public servant.
“I come from an intellectual tradition where public policy is important, it can make a positive contribution, it’s our social obligation to do this,” she says in an online version of the article. “We can help to make the world a better place.”
Yellen, who took the Fed’s reins in February, is set to testify on monetary policy before congressional committees Tuesday and Wednesday. She has long stressed the lingering damage the recession brought on the labor market, and is expected to do so again this week.
Still, a quickly falling unemployment rate and firming inflation is putting pressure on the central bank to consider setting the stage for a rise in interest rates, probably next year.
Reporting by Jonathan Spicer; Editing by Chizu Nomiyama