Janet Yellen, Chair of the Federal Reserve, faced two days of testimony from lawmakers on Capitol Hill on Tuesday and Wednesday to discuss monetary policy and economic issues. This is a semiannual occurrence for the Federal Reserve chief, who heads before a panel to answer questions related to the recent release of the Fed’s Monetary Policy Report, which was made available on Tuesday. The 60-page report details recent trends and provides insight into several key economic factors impacting the country as a whole.
Yellen last took the stand in February when she presented Congress with numbers that included a 6.7 percent unemployment rate, and annual inflation of 1.2 percent. This time, she will be able to report some success in raising employment numbers, but also that there was an uptick in inflation by the tune of 0.6 percent. While the economy is certainly on more solid footing than it was towards the beginning of the year, there is still quite a bit of work to do.
Another area of concern was contraction in the country’s GDP during the first-quarter of 2014. In the report, Yellen does acknowledge that, and points to a stronger second-quarter in calming fears. That wasn’t the only area of concern, as student debt and the troubled housing market are also addressed. The report’s summary takes everything into account, leaving off that there is still considerable “slack” left on the economic playing field.
“The overall condition of the labor market continued to improve during the first half of 2014. Gains in payroll employment picked up to an average monthly pace of about 230,000, and the unemployment rate fell to 6.1 percent in June, nearly 4 percentage points below its peak in 2009. Notwithstanding those improvements, a broad array of labor market indicators — such as labor force participation, hiring and quit rates, and the number of people working part time for economic reasons — generally suggests that significant remains in the labor market,” the report says.
When facing legislators over the past couple of days, Yellen also had a lot of explaining to do regarding the Fed’s plans for the future, and the major areas of concern addressed in the report. Read on to see six of the most important questions Yellen faced and how she responded to them.