February 20, 2014

Yellen testifies on policy Thursday

Feb. 21, 2014 – Federal Reserve Board Chair Janet Yellen is expected to discuss the Fed's position on quantitative easing when she delivers a monetary policy report before the Senate Banking Committee on Thursday.

Yellen testified on the same subject matter Feb. 11 before the House Financial Services Committee; the Senate Banking hearing scheduled to follow in the same week was postponed due to the snowstorm in Washington.

During the House committee hearing, Yellen said she was surprised by disappointing job growth in December and January. However, she was optimistic about the outlook for economic growth in the coming year. Unless there is a "notable change" in the Fed's assessment of the economy, it will continue to cut back on its monthly bond purchases, she said.

In January, the Federal Open Market Committee announced the Fed will taper its asset-purchase program by another $10 billion, slowing that to $65 billion a month, but is leaving its federal funds rate target unchanged for now. NAFCU Chief Economist David Carrier expects the Fed to continue to scale back its asset purchase program unless the economy gets worse.

Yellen was sworn in as Fed chair on Feb. 3. NAFCU's board met with Yellen at Federal Reserve Board headquarters in December 2012 on issues important to the Fed and credit unions.

On Tuesday, the Senate Banking Committee will also hold a hearing on reauthorization of the Terrorism Risk Insurance Act.