Federal Reserve Chair Janet Yellen said again that the U.S. central bank will keep paring back its asset purchase program although the economic recovery remains incomplete, in testimony today before the Senate Banking Committee.
"The Federal Reserve will likely reduce the pace of asset purchases in further measured steps at future meetings," Ms. Yellen said in remarks prepared for the committee, essentially a repeat of her comments to a House panel on Feb. 11.
Bond purchases "are not on a preset course," she added.
In the second day of her semi-annual testimony on the economy and monetary policy, Ms. Yellen also repeated her pledge to keep the benchmark interest rate at record lows while the unemployment rate remains above 6.5 percent and the outlook for inflation doesn't exceed 2.5 percent, ICN.com Financial Markets reported.
"I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level," Ms. Yellen told the senators.
She also said the jobs market is far from recovery, adding that she and the other members of the Federal Open Market Committee "anticipate that economic activity and employment will expand at a moderate pace this year and next, the unemployment rate will continue to decline toward its longer-run sustainable level, and inflation will move back toward 2 percent over coming years."
The FOMC, at its Jan. 28-29 meeting, said it would soon have to modify the year-old commitment, according to minutes released last week, while some members questioned "the reliability of the unemployment rate as an indicator of overall labor-market conditions."
Unemployment fell to 6.6 percent last month, even as other indicators showed continued flabbiness in the jobs market.
ICN.com Financial Markets contributed.
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