"I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level."
- Janet Yellen, Fed Chairman
New Federal Reserve chair Janet Yellen on Tuesday said that she would not make any drastic changes to her predecessor's monetary policy and would stick to tapering stimulus in "measured steps", even amid recent weak employment reports. In her first appearance as the U.S. central bank chief, Yellen underscored the Fed would need to constantly monitor the number of long-term unemployed Americans and those working only part-time, but who seek a full-time job.
While the U.S. jobless rate has declined 1.5 percentage points since the latest asset-buying programme began in September 2012, at 6.6% the rate remains "well above levels" the Fed perceives as consistent with maximum sustainable employment, underlying that the unemployment rate alone is not an adequate gauge of health in the labor market. Also, she said that financial-market turmoil does not pose a major threat to the outlook for the U.S. economy. In addition to that, Yellen signalled that interest rates would remain low.
The U.S. Dollar reacted quite sharply on Yellen's testimony, plummeting to the lowest level in four weeks and extending its losing streak against the Euro to the longest in two months.
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