{"id":107730,"date":"2014-02-12T15:56:25","date_gmt":"2014-02-12T15:56:25","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/?p=107730"},"modified":"2014-02-12T15:56:25","modified_gmt":"2014-02-12T15:56:25","slug":"us-fed-chair-janet-yellen-reassures-wall-street-easy-money-policy","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/latest-news\/us-fed-chair-janet-yellen-reassures-wall-street-easy-money-policy\/","title":{"rendered":"US Fed Chair Janet Yellen reassures Wall Street on easy money policy"},"content":{"rendered":"

Andre Damon\u00a0<\/strong>
\nRINF Alternative News<\/a><\/strong><\/p>\n

US Federal Reserve Chair Janet Yellen reassured Wall Street in her first congressional testimony Tuesday that the Fed would continue its zero-interest-rate policies into the indefinite future.<\/p>\n

Yellen, who was sworn in earlier this month, told the House Financial Services committee to expect \u201ca great deal of continuity\u201d with the policies of her predecessor, Ben Bernanke. She added, \u201cI served on the [Federal Open Market] committee as we formulated our current policy strategy, and I strongly support that strategy.\u201d<\/p>\n

The stock market rallied following her testimony, with the Dow Jones Industrial Average closing up by 192 points. Wall Street was particularly enthusiastic about Yellen\u2019s assurances that the Fed would maintain the Federal Funds rate at near zero \u201cwell past the time that the unemployment rate declines below 6-1\/2 percent.\u201d<\/p>\n

In 2012, Ben Bernanke said that the Fed would consider raising the rate if unemployment dropped to 6.5 percent. The official unemployment rate hit 6.6 percent in January, largely as a result of workers giving up looking for work. According to the Economic Policy Institute, some 5.73 million such \u201cmissing workers\u201d have exited the labor force over the past five years.<\/p>\n

Yellen admitted in her testimony that a significant section of the decline in the unemployment rate is attributable to workers dropping out of the labor force, saying, \u201cIt seems to me, based on the evidence I\u2019ve seen, that some portion of [the fall in unemployment] does reflect discouragement about job opportunities.\u201d<\/p>\n

Yellen\u2019s testimony follows the worst two-month period for jobs growth since 2010. The US economy created 113,000 jobs in January, according to last week\u2019s report by the Labor Department, far fewer than the 189,000 economists had predicted. This followed an even more disastrous jobs report for December, when the US economy added only 75,000 jobs.<\/p>\n

While Yellen noted that \u201cthe jobs reports in December and January showed that job creation was running a little under what I had anticipated,\u201d she stressed that the slow jobs growth for those two months did not substantially alter the Fed\u2019s outlook on the economy. \u201cWe have to be very careful not to jump to conclusions about what those reports mean,\u201d she said.<\/p>\n

The committee members were effusive in their praise of Yellen, who together with Bernanke is one of the chief architects of the massive growth of social inequality in the US. One committee member referred to the appointment of Yellen as \u201can important, historic achievement in the women\u2019s movement.\u201d<\/p>\n

Under the chairmanship of Bernanke, the Federal Reserve responded to the 2008 financial crash through an unprecedented series of multi-trillion-dollar cash infusions into the financial system, which ultimately swelled the central bank\u2019s balance sheet from under $1 trillion in 2008 to a current level of more than $4 trillion.<\/p>\n

The Federal Reserve had been purchasing $85 billion in Treasury and mortgage-backed securities per month, but it announced that it would reduce its monthly pace of purchases to $75 billion in January and to $65 billion in February. In her testimony, Yellen reaffirmed that another reduction in the pace of asset purchases is likely to be announced at the next policy meeting in March.<\/p>\n

\u201cDespite the reaffirmation of the Fed\u2019s tapering agenda, the overall tone of her remarks could be characterized as dovish,\u201d Millan Mulraine, a strategist at TD Securities, told the\u00a0Financial Times<\/em>. \u201cIn particular, she reiterated the Fed\u2019s expectation that \u2018a highly accommodative policy will remain appropriate for a considerable time after asset purchases end.\u2019\u201d<\/p>\n

The Federal Reserve\u2019s unprecedented money-printing operations and zero-interest-rate policies have resulted in an enormous run-up in stock values, even as the condition of the real economy remains heavily depressed. While the Dow Jones Industrial Average has more than doubled since 2009, the US economy has nearly a million fewer jobs than it did before the start of the crisis.<\/p>\n

Yellen brushed off concerns about a stock market bubble, saying that, while the Fed is on the lookout for asset bubbles, officials \u201chave not seen that in stocks, generally speaking.\u201d<\/p>\n

Yellen likewise dismissed concerns that the Federal Reserve\u2019s pullback from its aggressively expansionary monetary policy was fueling a crisis in emerging markets, saying, \u201cour sense is that at this stage these developments do not pose a substantial risk to the US economic outlook.\u201d<\/p>\n

However, Yellen warned about the continued prevalence of mass, long-term unemployment: \u201cThose out of a job for more than six months continue to make up an unusually large fraction of the unemployed,\u201d and added that \u201cthe number of people who are working part-time but would prefer a full-time job remains very high.\u201d<\/p>\n

Texas Democrat Ruben Hinojosa warned that the \u201cability of the U.S. economy to create wealth is now outstripping its ability to create jobs,\u201d and voiced concern about the growth of social inequality.<\/p>\n

Yellen said that she was \u201cvery concerned\u201d about the growth of inequality, noting that, \u201cThe gains have been so unequally distributed.\u201d She added that, \u201cI think it\u2019s one of the most important issues, and one of the most disturbing trends facing the nation at the present time.\u201d<\/p>\n

In reality, Yellen, who served as president of the Federal Reserve Bank of San Francisco from 2004 to 2010, and afterwards served as the Federal Reserv\u2019s vice-chair, has supported and continues to support a policy that has produced the staggering growth of social inequality in the United States.<\/p>\n

Since the 2008 crash the policy of the Obama administration and Federal Reserve has been to prop up the wealth of the financial elite through an unprecedented expansion of the money supply, even as the government sought to slash wages, pensions, and social services. As a result of these policies, the wealth of the US\u2019s billionaires has doubled since the 2009, while the median household income has plummeted by 8.3 percent since 2007.<\/p>\n

Andre Damon is a writer for WSWS<\/a>.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Andre Damon\u00a0 RINF Alternative News US Federal Reserve Chair Janet Yellen reassured Wall Street in her first congressional testimony Tuesday that the Fed would continue its zero-interest-rate policies into the indefinite future. Yellen, who was sworn in earlier this month, told the House Financial Services committee to expect \u201ca great deal of continuity\u201d with the […]<\/p>\n","protected":false},"author":1,"featured_media":67033,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-107730","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-latest-news"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/107730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=107730"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/107730\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media\/67033"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=107730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=107730"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=107730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}