Federal Reserve Chair Janet Yellen reiterated on Wednesday the central bank's pledge to continue its accommodative stance as inflation and employment are still far from its goals.
"A high degree of monetary accommodation remains warranted," Yellen said today in testimony prepared for delivery to the Joint Economic Committee of Congress.
"Many Americans who want a job are still unemployed," and inflation is below the central bank's 2 percent target, she said. "While conditions in the labor market have improved appreciably, they are still far from satisfactory."
She called the jobless rate "elevated," last recorded at 6.3% in April, and said the share of the labor force that has been unemployed for more than six months, as well as those working part-time who would prefer full-time work, "are at historically high levels."
Payrolls rose by the most in two years last month at 288,000.
However, labor-force participation rate fell to 62.8%, the lowest level since 1978, which was a main contributor to unemployment hitting its lowest since September 2008 at 6.3%.
Yellen said "sufficient underlying strength" made the measured reductions in bond purchases "appropriate."
At the same time, the Fed has said its key interest rate is likely to remain close to zero for a "considerable time" after the asset buying ends.
There is "solid growth " seen the second quarter, indicating the rest of the year could see a faster expansion, Yellen added.
Yellen said the slowdown in the housing sector "heightened geopolitical tensions," and financial stress in emerging markets are risks to growth.
Original headline: Fed's Yellen: The Federal Reserve vows a 'higher degree of accommodation'
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