WASHINGTON (AP) — The No. 2 official at the Federal Reserve said Monday that she does not see any risks at the moment from the Federal Reserve's low-interest rate policies that would prompt her to urge that the policies be curtailed.
Janet Yellen, vice chair of the Fed, provided an aggressive defense of the central bank's efforts to keep interest rates low, seeking to answer critics both inside and outside of the Fed who have warned that the efforts could generate higher future inflation or market instability.
The Fed is buying $85 billion per month in Treasury bonds and mortgage-backed securities to push long-term rates lower.
Yellen said while the risks needed to be monitored closely, "At this stage, I do not see any that would cause me to advocate a curtailment of our purchase program."
Her comments to a policy conference sponsored by the National Association for Business Economics echoed remarks Federal Reserve Chairman Ben Bernanke made last week in congressional testimony and in a speech he made Friday night.
Yellen said that while there were risks from the Fed's aggressive efforts to boost the economy and reduce unemployment, there were also risks from not being aggressive enough.
"At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment," Yellen said.
The comments from both Yellen and Bernanke sent a strong signal that the Fed is standing by its low-interest rate policies. Questions about whether the Fed might decide to curtail the bond purchases and end them altogether had arisen based on criticism from some Fed regional bank presidents that they believed the risks outweighed the benefits of the bond purchases.
Both Yellen and Bernanke sought to assure financial markets that the Fed is closely monitoring the bond buying efforts and will respond to any threats that the purchases, which have pushed the Fed's holdings above $3 trillion, could raise the threat of financial instability. Some critics have worried that the extended period of low interest rates were causing some investors to pursue riskier investments.
Yellen said that at the moment she did not see "pervasive evidence of trends such as rapid credit growth, a marked buildup in leverage or significant asset bubbles that would clearly threaten financial stability."
Team Jeb Hits Back at Trump for Being 'Soft on Crime,' Cites Past Support for Legalizing Drugs | Cortney O'Brien
Sen. Chris Murphy Admits That Gun Control Legislation From Washington Probably Won’t Stop Shootings | Matt Vespa
To Hell With You People | RedState
Political Calculations - What Is Your U.S. Income Percentile Ranking?
Even the State Department help desk didn't know about Hillary Clinton's private address
Doctors Will Be the Scapegoats in the Coming Obamacare Disaster | Human Events
Father of Murder Victim Will Campaign For Gun Control, After He Buys One - Bearing Arms - Anti-Gun Hysteria
Scarborough: Cable news has put lives at risk, including MSNBC, for “a few ratings points” - Hot Air
Thomas Sowell - A Revealing Clue