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Federal Reserve has 'more work to do' to aid recovery, says Janet Yellen

Remarks from US President Barack Obama's nominee to lead the Federal Reserve bolstered expectations in financial markets that the central bank would continue its easy money campaign to nurse the US economy back to health.

twitter-logo Reuters   Washington     Last Updated: November 14, 2013  | 13:16 IST
Federal Reserve Vice Chair Janet Yellen
Federal Reserve Vice Chair Janet Yellen. PHOTO: Reuters

Janet Yellen, President Barack Obama's nominee to lead the Federal Reserve, thinks the US central bank has "more work to do" to help an economy and a labour market that are still underperforming.

Her testimony appeared aimed in part at pre-empting Republicans on the panel who are critical of the Fed's unorthodox and aggressive monetary policy.

"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," Yellen, the Fed's vice chair, said in remarks prepared for delivery to the Senate Banking Committee on Thursday.

Her prepared remarks bolstered expectations in financial markets that the central bank would continue its easy money campaign to nurse the US economy back to health.

If confirmed by the Senate, Yellen would be the first woman to lead the US central bank. Although she can expect pointed questioning from Republicans when the hearing opens, she is widely expected to win the Senate's backing.

Yellen said the economy and the labour market were performing "far short" of their potential, while price pressures remained muted.

"Inflation has been running below the Federal Reserve's goal of 2 percent and is expected to continue to do so for some time," she said, according to a copy of the testimony made available on Wednesday in advance of the hearing.

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