Janet Yellen testifies before the congressional Joint Economic Committee on America’s economic outlook today—one of her final official acts before
Janet Yellen testifies before the congressional Joint Economic Committee on America’s economic outlook today—one of her final official acts before standing down in February.
With third-quarter growth figures to be revised from 3% up to 3.2% today and unemployment rates at a historic low of 4.1%, Yellen’s short-term outlook is likely to be rosy. One area of concern will be inflation, which despite strong employment levels, remains significantly below the Fed’s 2% target at 1.3%.
Today’s testimony follows an announcement earlier this month that Yellen will not be granted a second term as Fed chair; she’s to be replaced by Jerome Powell, who testified before the Senate yesterday and is likely to be confirmed before the end of the year.
Addressing low inflation levels will be Powell’s first challenge as chair. Powell has promised continuity of Yellen’s cautious monetary strategy of incrementally increasing interest rates; however, he’ll need to revise that policy if inflation remains low.
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