According to prepared remarks for her biannual report to Congress, Ms. Yellen will testify that the economy continued to grow despite a slowdown in the final months of 2015, and the labor market continued to improve.
But her assessment, while upbeat, was clouded by more caveats than her last public remarks in December. She noted that a recent pullback by investors, particularly away from riskier borrowers, could yet undermine domestic growth.
“Financial conditions in the United States have recently become less supportive of growth,” Ms. Yellen said in the testimony. “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.”
The Fed raised short-term interest rates in December for the first time since the financial crisis. It started small, ending a seven-year period in which it held rates near zero with a rate increase to a range between 0.25 percent and 0.5 percent. Low rates are intended to encourage borrowing and risk-taking, and the Fed said it planned to gradually curtail those incentives as the economy gained strength.
Ms. Yellen did not specifically address the timing of future increases in the Fed’s benchmark rate. Analysts began the year expecting the Fed to raise rates in March, but many now expect that the Fed will not act before June.
http://www.nytimes.com/2016/02/11/business/economy/yellen-fed-congress.html?_r=0
But her assessment, while upbeat, was clouded by more caveats than her last public remarks in December. She noted that a recent pullback by investors, particularly away from riskier borrowers, could yet undermine domestic growth.
“Financial conditions in the United States have recently become less supportive of growth,” Ms. Yellen said in the testimony. “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.”
The Fed raised short-term interest rates in December for the first time since the financial crisis. It started small, ending a seven-year period in which it held rates near zero with a rate increase to a range between 0.25 percent and 0.5 percent. Low rates are intended to encourage borrowing and risk-taking, and the Fed said it planned to gradually curtail those incentives as the economy gained strength.
Ms. Yellen did not specifically address the timing of future increases in the Fed’s benchmark rate. Analysts began the year expecting the Fed to raise rates in March, but many now expect that the Fed will not act before June.
http://www.nytimes.com/2016/02/11/business/economy/yellen-fed-congress.html?_r=0
