Janet Yellen, who will become the first woman Chair of the Federal Reserve, expressed economic optimism in an interview with Time. Yellen is replacing the current Chair, Ben Bernanke, when his term expires on January 31. She was confirmed by the Senate in a 56-26 vote on January 6.
“I think we’ll see stronger growth this year. Most of my colleagues on the Fed’s policymaking committee and I are hopeful that the first digit [of GDP growth] could be 3 rather than 2,” Yellen said. “The recovery has been frustratingly slow, but were making progress in getting people back to work, and I anticipate that inflation will move back toward our longer-run goal of 2 percent.” Yellen also defended the Fed’s monthly asset-purchases. In December, the Fed decided to scale back the program. Instead of buying at a monthly rate of $85 billion per month, $10 billion was taken out of the equation, bringing the monthly totals to $75 billion. Further reductions throughout 2014 are expected.
Yellen resisted the claim that the program only aided the wealthy. “Our policy is aimed at holding down long-term interest rates, which supports the recovery by encouraging spending. And part of the [economic stimulus] comes through higher house and stock prices, which causes people with homes and stocks to spend more, which causes jobs to be created throughout the economy and income to go up throughout the economy.”