- Yellen Says the Economy is Moderately Healthy
The Federal Reserve Chair Janet Yellen on Monday said the U.S. economy is moderately healthy, mainly boosted by consumer spending and record low unemployment rate.
“Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could,” Yellen said Monday in Ann Arbor, Michigan. The Fed is now trying to “give it some gas, but not so much that we’re pushing down hard on the accelerator.”
According to the Chair, unemployment, at 4.5 percent, now stands a bit below what she and many of her colleagues consider to be its lowest sustainable rate. Inflation, she said, was still slightly below target, emphasizing her focus on the measure that excludes food and energy.
“It’s still slightly below 2 percent in my estimation,” she said.
The Fed’s preferred gauge of inflation rose to 2.1 percent in the 12 months through February, the first time it’s reached the central bank’s 2 percent target in almost five years. The so-called core version of that measure, however, showed price rises have been fairly steady at between 1.6 percent and 1.8 percent for much of this year.
She further stated that the U.S. central bank’s task has shifted from a post-crisis exercise of healing the economy to one aimed at holding on to progress made.
“Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could,” Yellen said Monday in Ann Arbor, Michigan. The Fed is now trying to “give it some gas, but not so much that we’re pushing down hard on the accelerator.”