Fed Chairwoman Yellen says economic growth will continue

In a statement she made at the session held by the US Senate Banking Committee Fed Chairwoman Yellen said that she did not see any indication that the economic growth could stop anytime soon and added that she had reasonable confidence that the growth would continue. The chairwoman answered questions forwarded by the senators on topics like inflation, developments in dollar and global economy etc.

Yellen emphasized that the fall in inflation was not affected by developments in the dollar and the global economy. In reply to the question “why inflationary pressures had weakened over the last few months” she pointed out that one-time decline in prices for certain products, such as wireless phone services and prescription drugs had played an important role in the falling of the inflation

Yellen also added that she thought it would be premature to think the basic inflationary trend had fallen well below 2 percent. Yellen also said they were watching the data closely and she had not reached such a conclusion. Yellen went on to say “I think the risks to inflation are two-way. On the one hand, we have seen weak inflation figures over the last few months. On the other hand, we have a very tight labor market and employment continues to grow. This suggests that inflationary pressures will strengthen even if delayed as the laxity in economy decreases.

Yellen stated that if the Fed’s views on inflation changed, the interest policy would be adjusted to the new expectations.