Washington- The Federal Reserve Chairwoman Janet Yellen on Tuesday left open the possibility of an interest-rate increase in 2017. She affirmed that the Fed is addressing some fiscal policies to tackle the budget deficit in the United States.
In her semi-annual testimony to the Senate Banking Committee, Yellen stressed the solidity of U.S. economy and banking sector and presented statistics related to the drop of unemployment rate, increase of job opportunities and enhancement of monetary and financial policies.
“At the upcoming meetings, the Fed would depend heavily on U.S. economic data to determine if the labor market continues to strengthen and inflation is moving up to the central bank’s 2% target,” Yellen said.
The Fed hinted on three raises in interest rate during 2017. However, the council adopts open-policies to cope with the economic consequences while observing the new fiscal policy of U.S. President Donald Trump that aims at accelerating economic growth to 4% from 2% in the current time.
“It is too early to know how the economic effects of changes in the taxes’ policy will unfold,” she added.
Yellen seemed reserved regarding economic programs and procedures the U.S. administration is willing to undertake to revive the economy.
She defended the Fed’s policy to hold its balance sheet steady at USD4.5 trillion, saying this “has helped maintain accommodative financial conditions.” Yellen added that the industrial and commercial borrowing rose by 75%, underscoring the strength of U.S. banking system and the availability of liquidity and capital.