Federal Reserve Chairwoman Janet Yellen said the US must be mindful of how short the Fed is of its goals of full employment and price stability, Bloomberg News reported.
“The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained,” Yellen was quoted as saying in a speech to the Economic Club of New York on Wednesday.
The jobless rate of 6.7 percent is more than a percentage point higher than the top end of the Fed’s estimate of full employment, while inflation is more than a percentage point below the 2 percent goal, the report said.
It will take more than two years for the economy to close in on the Fed’s goals, Yellen was quoted as saying. She spoke of a “continuing commitment” to support the economy, which since December 2008 has taken the form of a policy rate held in a range of zero to 0.25 percent, the report said.
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