Yellen Repeats Uncertainty Warrants `Cautious Approach' by Fedby
Fed chair makes remarks in interview with Time Magazine
`We are focused on Main Street' to boost jobs, Yellen says
Federal Reserve Chair Janet Yellen said that the central bank has to move with care as it sets monetary policy to avoid taking decisions that do more harm than good to the U.S. economy.
“We necessarily operate in an environment in which there’s a great deal of uncertainty,” she told Time Magazine in an interview published online Wednesday. “In such an environment, it makes sense to use a risk-management approach to identify and avoid the big mistakes. That’s one reason I favor a cautious approach.”
The remarks echo other recent Yellen comments and follow the Fed’s decision to hold interest rates unchanged last month to wait for more clarity on whether slower growth abroad will dampen the U.S. economy and hobble the central bank’s efforts to drive inflation higher.
The policy-setting Federal Open Market Committee next meets on April 26-27. Investors see zero chance that officials will raise rates, based on pricing in interest-rate futures, and only expect one increase this year. Officials themselves forecast two hikes in 2016 -- half the number they projected in December before financial market turmoil spurred by doubts over Chinese growth prompted them to reassess.
In the interview, Yellen said that Fed policy was aimed at benefiting all Americans. “We are focused on Main Street, on supporting economic conditions -- plentiful jobs and stable prices -- that help all Americans,” she said.
The article didn’t indicate precisely when the interview took place, saying it occurred recently.