MIAMI (CBSMiami) — Federal Reserve Chairwoman Janet Yellen said Tuesday the central bank will “evaluate whether employment and inflation are continuing to evolve in line with [the Fed’s] expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”
She made the remarks during testimony on Capitol Hill as part of her semiannual monetary policy report to Congress.
Yellen, went on to add, “it’s too early to know what policy changes will be put in place or how their economic effects will unfold,” but did reiterate that the U.S. economy and job markets have strengthened and inflation is edging up, closer to the Fed’s two percent target.
She went on to emphasize that key rate hikes will occur gradually, but did caution, “waiting too long to remove accommodation would be unwise, potentially requiring the (Fed) to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession.”
President Trump has indicated he wants to implement a monetary program that includes deep tax cuts, stimulus spending and deregulation. His initiatives intend to achieve his goal of doubling growth to around four percent, up from the anemic two percent pace that has persisted over the last decade.
Yellen agreed an executive order from the president calling for a review of the usefulness of current polices and regulations could be helpful.
Yellen said she hoped any tax and spending changes would help increase worker productivity, accelerate economic growth and raise living standards.