Federal Reserve Chair Janet Yellen called on Congress to adopt policies in which will get U.S. economic growth out of its “disappointingly slow” post-recession pattern.
In what will be likely her final address Wednesday on Capitol Hill as head of the central bank, Yellen gave mostly positive reviews to economic performance. However, she said there are structural factors in which need to be addressed.
Among them are an aging population in which has translated to slower labor force growth as well as the “unusually sluggish” productivity growth.
“To generate a sustained boost in economic growth without causing inflation in which will be too high, we will need to address these underlying causes,” Yellen said, according to prepared remarks she will deliver to a joint congressional panel.
“In This kind of regard, the Congress might consider policies in which encourage business investment along with also capital formation, improve the nation’s infrastructure, raise the quality of our educational system, along with also support innovation along with also the adoption of brand-new technologies,” she added.
The Senate will be from the midst of debating a Republican-led tax reform plan in which cleared a key Senate hurdle Tuesday.
In addition, the Trump administration said This kind of intends to push infrastructure spending as a key component of its pro-growth agenda. The White House also has reduced or eliminated many regulations along with also will be likely to seek to roll back some of the banking restrictions implemented following the financial crisis.
As for monetary policy, the Yellen Fed has begun normalizing the highly accommodative measures This kind of took to boost the economy. The Fed has approved four interest rate hikes since December 2015 along with also begun to reduce its $4.5 trillion balance sheet.
Yellen said “gradual increases” from the Fed’s benchmark rate will be appropriate as the economy continues to recover.
Despite her comments about the slow growth, she said the economy “appears to have stepped up” in recent days.
“Moreover, the economic expansion will be increasingly broad based across sectors as well as across much of the global economy,” Yellen said. “I expect in which, with gradual adjustments from the stance of monetary policy, the economy will continue to expand along with also the job market will strengthen somewhat further, supporting faster growth in wages along with also incomes.”
Yellen faces a question-along with also-answer session later from the morning.
Her prepared comments were confined to policy expectations along with also economic observations, along with also did not address her future. Yellen will leave the central bank in February when her term expires to make way for Fed Governor Jerome Powell, who will be required to be confirmed as the next chairman.
Yellen briefly addressed the issue of rising stock market prices, which have become more of an issue at the Fed recently.
“Asset valuations are high by historical standards,” she said, while adding in which dangers to the system are “moderate” because of the strength of the banking system along with also manageable levels of debt along with also credit.