This morning Janet Yellen is scheduled to speak to the House Financial Services Committee and apparently the news is, well, good. Her prepared testimony apparently states that the economy is improving and that the Fed will continue to “pare its monetary stimulus.”
One of the major concerns for U.S. policy makes is the recent eruptions in global financial markets that could make their way across the ocean to impact the United States. Yellen says that the Fed does not see these as major risks to the U.S. economy.
“Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook,” her testimony will announce.
She also added that she, and her fellow policymakers at the Federal Reserve, are expecting the U.S. economy to continue to expand with moderate growth for this year and for that to continue into 2015.
The good news is not the only news surrounding her appearance in front of this committee. This appearance is also her first public appearance as the chair of the Fed, which means that it will also be the first time a woman has addressed the House Financial Services Committee as the chair of the Fed. She succeeded Ben Bernanke on February 1st.
“While Yellen has served the Fed at different times and in different roles over the past 36 years, this testimony offers her a unique opportunity to reintroduce herself to the world in her newly-elevated capacity,” said the chief economist at Credit Suisse, Neal Soss.
Yellen believes that much of the recovery has been due to traction that was gained in the last half of last year. It was at that time that economic growth picked up she says. She also acknowledges there has been “further progress in the labor market.”
However, it is not all good news, a shoe that no doubt the American public knew was about to drop. The countries current 6.6% unemployment rate is clear well above levels that she and other policymakers would consider “optimal.” The major area of concern is Americans who have been unemployed for more than six months as they continue to make up a very large portion of the unemployed in this country.
Some think however that Yellen’s testimony will prove fairly uninspiring as it will not contain much new information. Soss added that he believes that she will tell a story of “continuity” rather than one of “innovation.”
Still, there are some important questions that lawmakers and tax payers would like to have asked. How much growth can be expected and how low could the country get the unemployment rate realistically, are all questions on American minds.
As the first woman to ever be the chair of the Fed addresses the House there will certainly be many eyes and ears tuned into her historic testimony. However, Janet Yellen’s testimony that the economy is improving and that this growth has been developing for the last six months and which could continue into the year 2015 will also be closely scrutinized.
By Nick Manai