WASHINGTON—U.S. economic activity will grow at a moderate but steady pace for the rest of 2014, according to Federal Reserve Chair Janet L. Yellen.
“I expect that economic activity will expand at a somewhat faster pace this year than it did last year, that the unemployment rate will continue to decline gradually and that inflation will began to move toward 2 percent,” Ms. Yellen said in recent testimony before the congressional Joint Economic Committee.
The Gross Domestic Product grew about 3.25 percent in the second half of last year—a faster pace than any time during the two previous years, she said, and conditions in the labor market have improved but are still far from satisfactory.
Inflation continues to be low even as the economy expands, she said, but the reasons for low inflation—such as declines in non-oil import prices—are likely to be temporary. Inflation that persistently hovers below 2 percent could pose risks to economic performance, she added, and the Federal Open Market Committee continues to monitor inflation closely.