WASHINGTON (July 16, 2014) — Despite continuing signs of uncertainty, economic activity in the U.S. should continue to grow moderately over the next several years, said Federal Reserve Chair Janet L. Yellen in congressional testimony.
Accommodative monetary policy, diminished drag from fiscal policy, higher home prices and stronger foreign growth should all contribute to a growing economy in the foreseeable future, Ms. Yellen told the Senate Banking, Housing and Urban Affairs Committee at a July 15 hearing.
At that hearing, Ms. Yellen also officially presented the Federal Reserve's annual Monetary Policy Report to Congress.
“The (Federal Open Market) Committee sees the projected pace of economic growth as sufficient to support ongoing improvement in the labor market with further job gains, and the unemployment rate is anticipated to continue to decline toward its longer-run sustainable level,” she said.
Although the economy is improving steadily, the recovery is still incomplete, according to Ms. Yellen.
“Labor force participation appears weaker than one would expect, based on the aging of the population and the level of unemployment,” she said.
Also, the Gross Domestic Product declined sharply in the first quarter of 2014, according to Ms. Yellen, who noted that “the decline appears to have resulted mostly from transitory factors, and a number of recent indicators of production and spending suggest that growth rebounded in the second quarter, but this bears close watching.”