"Let me emphasize that I expect a great deal of continuity in the (Federal Open Market Committee's) approach to monetary policy," Yellen said in her first House testimony today since taking over from
Yellen and the FOMC expect economic activity and employment will expand at a moderate pace this year and next, she told the
"We have been watching closely the recent volatility in global financial markets," Yellen said. "Our sense is that, at this stage, these developments do not pose a substantial risk to the U.S. economic outlook."
Former Fed vice chair, Yellen served on the FOMC as it crafted its current policy strategy. She said while the Fed's bond purchases weren't on a "pre-set course," it would take "a notable change in the (economic) outlook" for it to slow down its tapering.
"I don't see any fancy new policy initiatives...likely to come in the near future," said economist
While the unemployment rate has fallen almost a percentage point since the middle of last year and 1.5 percentage points since the beginning of the current stimulus program, the labor market's recovery is "far from complete," according to Yellen. The unemployment rate still is well above levels consistent with maximum sustainable employment, Americans out of work for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people working part-time who would prefer a full-time job remains very high, she said.
"'Do no harm' is her motto unless the data changes more than we have seen so far,"
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