7 May 2014
Fed's Yellen: Slack in labor market remains considerable
FXStreet (Łódź) - Yellen says that a high degree of monetary accommodation is warranted given the considerable slack in the labor markets and low inflation.
• “There is a high level of long-term unemployment,” she stresses.
• The 6.5% threshold for considering interest rate hikes was set when unemployment rate was near 8%, Yellen reminds, emphasizing that it was a benchmark not a trigger.
• The trend of increasing inequality in income and wealth in the US could be offset by the Fed's efforts to boost growth.
• The Fed head acknowledges low household formation, high student debt, high house credit requirements.
• She adds however that the sector should pick up and that despite higher mortgage rates they are low by historical standards.
• “There is a high level of long-term unemployment,” she stresses.
• The 6.5% threshold for considering interest rate hikes was set when unemployment rate was near 8%, Yellen reminds, emphasizing that it was a benchmark not a trigger.
• The trend of increasing inequality in income and wealth in the US could be offset by the Fed's efforts to boost growth.
• The Fed head acknowledges low household formation, high student debt, high house credit requirements.
• She adds however that the sector should pick up and that despite higher mortgage rates they are low by historical standards.