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

seniors' savings.

Meanwhile, Republican Senator Rand Paul, a potential 2016 presidential candidate, is pushing a bill that would open up the Fed's monetary policy deliberations to congressional audit. A similar bill passed the House in 2012.

While an overhaul of the 100-year-old Fed is unlikely, the debate could amplify as the November midterm elections approach.

Asked in the lab how well the Fed is understood, Covington, a married father of three, admitted he knows little beyond the fact that it "gets the money and deals with the money."


Since the 2007-2009 recession, the Fed has effectively printed some $3 trillion. It has kept interest rates near zero for more than five years, and this month said it will keep them there for a considerable time even after it ends its bond-buying program, which is to be wound down later this year.

In her speech to some 1,100 people at a downtown convention center, Yellen said the "recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics."

She said "considerable" slack still exists in the job market and said further monetary stimulus could be effective.

"I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers," Yellen said.

In an unusual move, she cited by name three workers who lost their jobs or absorbed sharp pay cuts when the recession hit, including one who "scrambled for odd jobs and temporary work."

"This is not just an academic debate," she said. "For Dorine Poole, Jermaine Brownlee and Vicki Lira, and for millions of others dislocated by the Great Recession who continue to struggle, the cause of the slow recovery is enormously important."


Road trips are common for the presidents of the Fed's regional banks, who are supposed to gather information on the economy to bring to policy-setting meetings in Washington.

But they have not been for the head of the central bank, until Yellen's predecessor, Ben Bernanke, broke that mold with a concerted public campaign to address the Fed's critics.

In his last few speeches before retiring, Bernanke said the US central bank needed to show it is working in the public's interest or risk losing its policy independence.

Yellen, herself, who was the Fed's vice chair before becoming the central bank's chief, was previously president of the San Francisco Fed and did many

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