Janet Yellen takes case for Fed's easy money policies to the public

Apr 01 2014, 10:06 IST
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Republican congressman Janet Yellen says tour highlights Fed's 'outsized role' (AP) Republican congressman Janet Yellen says tour highlights Fed's 'outsized role' (AP)
SummaryJanet Yellen visits college lab; highlights plights of individuals

such road trips.

Getting the message out "is all well and good, but I think the average American is more concerned about the value of their money, how much things cost, and whether or not they have a job," Representative Patrick McHenry, a Republican who heads the House Financial Services Committee's oversight panel, said in a telephone interview.

"This type of tour might further highlight how political the Fed has become in intervening in the economy and the outsized role they play," he said.

In House testimony in February, Yellen strongly rejected the "Audit the Fed" bill, warning of how it could bring "political pressures to bear on the committee's judgment about what is the appropriate way to implement monetary policy."

The pressure could cool if the economy keeps improving. US economic growth picked up in the second half of last year, and the unemployment rate has dropped from a post-recession high of 10 percent in 2009 to 6.7 percent last month.

That drop is due in part to the droves of Americans who have given up the search for work.

Some economists and more hawkish Fed officials believe the decline in unemployment means little slack remains in the labor market and that inflation will soon rise.

Yellen disagreed, pointing to the unusually large proportion of long-term unemployment and the elevated number of Americans working part time who want full-time work. She also noted that there has been little upward pressure on wages.

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